One of the biggest decisions builders and tradies will make when starting their construction business is how to structure it.
It’s really important to get good advice up-front. How a building and construction business is structured will determine things like:-
- tax liability
- asset protection
- ongoing costs
- volume of paperwork
- reporting requirements
- the business owner’s personal responsibilities
- the extent the business owner may be personally liable for the business’s debts
Builders and tradies can operate their construction business: –
- as a sole trader
- through a company
- in partnership with someone else
- through a trust
- as part of a franchise
There are advantages and disadvantages of each different business structure type. Builders and tradies should talk to their accountant or financial or business advisors about which structure best suits them.
There are also free online government resources like www.business.gov.au to help builders and tradies work out the right business structure for their needs.
Accountants and financial advisors often advise builders and tradies to set-up companies to run their construction businesses because companies generally pay less tax than individuals. And holding assets through a company is a great way to protect them and to reduce risk.
What is a company?
Think of a company as a separate person. It has its own identity in the eyes of the law. Much like a person, a company can enter into contracts, buy property and borrow money.
QBCC’s licensing requirements
What many builders and tradies operating in Queensland don’t realise is their building company needs to have its own QBCC licence.
Building companies must have their own QBCC licence to lawfully carry out building work in Queensland.
It is not enough for the building company’s director to have a QBCC licence. A director cannot “loan” their QBCC licence to the building company or use their personal QBCC licence details on the building company’s contracts. These are big “no no’s”.
What happens if the building company is not licensed with QBCC?
Building companies carrying out building work without their own QBCC licence risk being fined or prosecuted by the QBCC. A building company should not be giving quotes, receiving payments or organising trades for building work without a QBCC licence.
How does a company get a QBCC licence?
A licence application form will need to be submitted to the QBCC and the licence application fee paid.
For more information about applying for a QBCC licence for a building company, contact the QBCC on 139 33 or visit the QBCC’s website at www.qbcc.qld.gov.au.
Need more help?
QBCC’s licensing requirements can be hard to understand. And there is no excuse for operating a construction business in Queensland without the right QBCC licence. If you need help, give us a call on (07) 3221 2527. We will walk you through the requirements.