{"id":"qld:sl-2018-0218","name":"Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018","slug":"queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018","collection":"regulation","jurisdiction":"qld","status":"in_force","isInForce":true,"actNumber":"218 of 2018","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":174829,"registerId":"qld-qld:sl-2018-0218-current","compilationNumber":null,"startDate":"2026-04-05","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"pt.1","sectionType":"part","heading":"Preliminary","content":"# Preliminary","sortOrder":0},{"sectionNumber":"sec.1","sectionType":"section","heading":"Short title","content":"### sec.1 Short title\n\nThis regulation may be cited as the Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018 .","sortOrder":1},{"sectionNumber":"sec.2","sectionType":"section","heading":"Commencement","content":"### sec.2 Commencement\n\nThis regulation commences on 1 January 2019.","sortOrder":2},{"sectionNumber":"sec.3","sectionType":"section","heading":"Main purpose","content":"### sec.3 Main purpose\n\nThe main purpose of this regulation is to prescribe, for section 116 (2) (ab) and schedule 2 of the Act , definition minimum financial requirements , the minimum financial requirements for—\nan applicant for a contractor’s licence; and\na licensee who holds a contractor’s licence.\nAn applicant for a contractor’s licence must satisfy the minimum financial requirements for the grant or renewal of a licence. See section 31 of the Act .\nA contractor’s licence is, under section 35 (5) of the Act , subject to conditions about satisfaction of the minimum financial requirements.\nThe commission may take action under section 50C of the Act in relation to a licensee’s satisfaction of the minimum financial requirements.\ns 3 sub 2019 SL No. 30 s 4\namd 2025 SL No. 12 s 10\n- (a) an applicant for a contractor’s licence; and\n- (b) a licensee who holds a contractor’s licence.\n- 1 An applicant for a contractor’s licence must satisfy the minimum financial requirements for the grant or renewal of a licence. See section 31 of the Act .\n- 2 A contractor’s licence is, under section 35 (5) of the Act , subject to conditions about satisfaction of the minimum financial requirements.\n- 3 The commission may take action under section 50C of the Act in relation to a licensee’s satisfaction of the minimum financial requirements.","sortOrder":3},{"sectionNumber":"sec.4","sectionType":"section","heading":"Definitions","content":"### sec.4 Definitions\n\nThe dictionary in schedule 3 defines particular words used in this regulation.\ns 4 amd 2019 SL No. 30 s 5","sortOrder":4},{"sectionNumber":"sec.4A","sectionType":"section","heading":"Reference to licensee includes reference to applicant","content":"### sec.4A Reference to licensee includes reference to applicant\n\nIn this regulation, if the context permits, a reference to a licensee includes a reference to an applicant for a contractor’s licence.\ns 4A ins 2019 SL No. 30 s 6","sortOrder":5},{"sectionNumber":"sec.4B","sectionType":"section","heading":"Meaning of prescribed accounting standard","content":"### sec.4B Meaning of prescribed accounting standard\n\nA prescribed accounting standard means any of the following documents published by the Australian Accounting Standards Board—\nAustralian Accounting Standards;\nStatements of Accounting Concepts;\nInterpretations;\nFramework for the Preparation and Presentation of Financial Statements.\nAlso, if a document mentioned in subsection (1) is amended or replaced, a prescribed accounting standard includes the document as in force immediately before it was amended or replaced.\nHowever, subsection (2) applies in relation to a document only for a period of 12 months starting on the day the amendment or replacement takes effect.\ns 4B ins 2020 SL No. 40 s 3\n(sec.4B-ssec.1) A prescribed accounting standard means any of the following documents published by the Australian Accounting Standards Board— Australian Accounting Standards; Statements of Accounting Concepts; Interpretations; Framework for the Preparation and Presentation of Financial Statements.\n(sec.4B-ssec.2) Also, if a document mentioned in subsection (1) is amended or replaced, a prescribed accounting standard includes the document as in force immediately before it was amended or replaced.\n(sec.4B-ssec.3) However, subsection (2) applies in relation to a document only for a period of 12 months starting on the day the amendment or replacement takes effect.\n- (a) Australian Accounting Standards;\n- (b) Statements of Accounting Concepts;\n- (c) Interpretations;\n- (d) Framework for the Preparation and Presentation of Financial Statements.","sortOrder":6},{"sectionNumber":"pt.2","sectionType":"part","heading":"Exemptions","content":"# Exemptions","sortOrder":7},{"sectionNumber":"sec.5","sectionType":"section","heading":"Exemption for holders of particular classes of contractor’s licence","content":"### sec.5 Exemption for holders of particular classes of contractor’s licence\n\nThis regulation, other than part 4B and section 17N , does not apply to a licensee if—\nthe licensee holds a contractor’s licence of a following class under the Queensland Building and Construction Commission Regulation 2018 , schedule 2 —\nbuilding design—low rise licence;\nbuilding design—medium rise licence;\nbuilding design—open licence;\nfire protection—water-based fire system stream—design licence;\nfire protection—electrical stream—design—fire alarm systems licence;\nhydraulic services design licences;\nsite classifier licences; and\nthe professional indemnity insurance held by the licensee under part 4B covers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\nthe licensee carries out work that is solely within the scope of work for the licence class.\ns 5 amd 2019 SL No. 30 s 7 ; 2020 SL No. 223 s 7\n- (a) the licensee holds a contractor’s licence of a following class under the Queensland Building and Construction Commission Regulation 2018 , schedule 2 — (i) building design—low rise licence; (ii) building design—medium rise licence; (iii) building design—open licence; (iv) fire protection—water-based fire system stream—design licence; (v) fire protection—electrical stream—design—fire alarm systems licence; (vi) hydraulic services design licences; (vii) site classifier licences; and\n- (i) building design—low rise licence;\n- (ii) building design—medium rise licence;\n- (iii) building design—open licence;\n- (iv) fire protection—water-based fire system stream—design licence;\n- (v) fire protection—electrical stream—design—fire alarm systems licence;\n- (vi) hydraulic services design licences;\n- (vii) site classifier licences; and\n- (b) the professional indemnity insurance held by the licensee under part 4B covers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\n- (c) the licensee carries out work that is solely within the scope of work for the licence class.\n- (i) building design—low rise licence;\n- (ii) building design—medium rise licence;\n- (iii) building design—open licence;\n- (iv) fire protection—water-based fire system stream—design licence;\n- (v) fire protection—electrical stream—design—fire alarm systems licence;\n- (vi) hydraulic services design licences;\n- (vii) site classifier licences; and","sortOrder":8},{"sectionNumber":"sec.6","sectionType":"section","heading":"Exemption for holders of builder—project management services class of contractor’s licence","content":"### sec.6 Exemption for holders of builder—project management services class of contractor’s licence\n\nThis regulation, other than part 4B and section 17N , does not apply to a licensee if—\nthe licensee holds a licence of the class builder—project management services under the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\nthe professional indemnity insurance held by the licensee under part 4B —\ncovers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\nprovides for a minimum limit of indemnity for a claim of at least $1M; and\nthe licensee carries out work that is solely within the scope of work for the licence class.\ns 6 amd 2019 SL No. 30 s 8\n- (a) the licensee holds a licence of the class builder—project management services under the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\n- (b) the professional indemnity insurance held by the licensee under part 4B — (i) covers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and (ii) provides for a minimum limit of indemnity for a claim of at least $1M; and\n- (i) covers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\n- (ii) provides for a minimum limit of indemnity for a claim of at least $1M; and\n- (c) the licensee carries out work that is solely within the scope of work for the licence class.\n- (i) covers the scope of work for the class mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 ; and\n- (ii) provides for a minimum limit of indemnity for a claim of at least $1M; and","sortOrder":9},{"sectionNumber":"sec.7","sectionType":"section","heading":"Exemption for special purpose vehicles","content":"### sec.7 Exemption for special purpose vehicles\n\nThis regulation, other than part 4B and section 17N , does not apply to a licensee that is a special purpose vehicle to the extent the licensee carries out building work under the public-private partnership for which the special purpose vehicle was established.\ns 7 amd 2019 SL No. 30 s 9","sortOrder":10},{"sectionNumber":"pt.3","sectionType":"part","heading":"Requirements for preparing and giving information","content":"# Requirements for preparing and giving information","sortOrder":11},{"sectionNumber":"pt.3-div.1","sectionType":"division","heading":"General requirements","content":"## General requirements","sortOrder":12},{"sectionNumber":"sec.8","sectionType":"section","heading":"Requirements for information or documents","content":"### sec.8 Requirements for information or documents\n\nThis section applies if a licensee is required to keep, or give the commission, information or documents under this regulation.\nThe information or documents must comply with the prescribed accounting standards.\nSee section 11D in relation to the requirements for MFR reports for particular licensees.\nHowever, if a requirement of this regulation is inconsistent with the prescribed accounting standards, the information or documents must comply with this regulation to the extent of the inconsistency.\nThe information or documents must be in English.\nAll references to monetary amounts in a document must be expressed in Australian dollars according to the rate of exchange that applies in Queensland on the day the document is prepared.\ns 8 sub 2019 SL No. 30 s 11\namd 2024 SL No. 6 s 3\n(sec.8-ssec.1) This section applies if a licensee is required to keep, or give the commission, information or documents under this regulation.\n(sec.8-ssec.2) The information or documents must comply with the prescribed accounting standards. See section 11D in relation to the requirements for MFR reports for particular licensees.\n(sec.8-ssec.3) However, if a requirement of this regulation is inconsistent with the prescribed accounting standards, the information or documents must comply with this regulation to the extent of the inconsistency.\n(sec.8-ssec.4) The information or documents must be in English.\n(sec.8-ssec.5) All references to monetary amounts in a document must be expressed in Australian dollars according to the rate of exchange that applies in Queensland on the day the document is prepared.","sortOrder":13},{"sectionNumber":"sec.8A","sectionType":"section","heading":"Requirements for particular information—group companies","content":"### sec.8A Requirements for particular information—group companies\n\nThis section applies if a licensee that is a group company is required to prepare or give any of the following information under another provision of this regulation—\nan MFR report;\ninternal management accounts;\nsigned financial statements.\nTo comply with the requirement, the licensee must give the information mentioned in subsection (1) for the licensee’s corporate group.\nFor subsection (2) , a reference in this regulation to the licensee includes a reference to the licensee’s corporate group.\ns 8A ins 2019 SL No. 30 s 11\n(sec.8A-ssec.1) This section applies if a licensee that is a group company is required to prepare or give any of the following information under another provision of this regulation— an MFR report; internal management accounts; signed financial statements.\n(sec.8A-ssec.2) To comply with the requirement, the licensee must give the information mentioned in subsection (1) for the licensee’s corporate group.\n(sec.8A-ssec.3) For subsection (2) , a reference in this regulation to the licensee includes a reference to the licensee’s corporate group.\n- (a) an MFR report;\n- (b) internal management accounts;\n- (c) signed financial statements.","sortOrder":14},{"sectionNumber":"pt.3-div.2","sectionType":"division","heading":"Information to accompany applications","content":"## Information to accompany applications","sortOrder":15},{"sectionNumber":"sec.8B","sectionType":"section","heading":"Particular information must accompany applications","content":"### sec.8B Particular information must accompany applications\n\nAn application for a contractor’s licence under section 33 of the Act must be accompanied by the following information—\nif the applicant’s proposed maximum revenue for a reporting year is not more than $800,000—a declaration in the approved form about the applicant’s compliance with the minimum financial requirements;\nif the applicant’s proposed maximum revenue for a reporting year is more than $800,000—an MFR report.\nHowever, an application need not be accompanied by the information mentioned in subsection (1) if—\nthe applicant is the holder of a contractor’s licence (an existing licence ) of a class other than the licence being applied for; and\nthe licensee’s total actual revenue will not exceed the maximum revenue approved for the existing licence, if the licence the subject of the application is granted.\nAn application for a licence under section 33 of the Act must also be accompanied by the following information for the applicant’s professional indemnity insurance—\na copy of the certificate of currency for the insurance;\nif the professional indemnity insurance does not comply with part 4B —a declaration, in the approved form, about the non-compliance;\nif the professional indemnity insurance complies with part 4B —a statutory declaration verifying compliance;\nif the insurance policy for the professional is arranged by an insurance broker—a receipt given by the broker for payment for the insurance.\ns 8B ins 2019 SL No. 30 s 11\n(sec.8B-ssec.1) An application for a contractor’s licence under section 33 of the Act must be accompanied by the following information— if the applicant’s proposed maximum revenue for a reporting year is not more than $800,000—a declaration in the approved form about the applicant’s compliance with the minimum financial requirements; if the applicant’s proposed maximum revenue for a reporting year is more than $800,000—an MFR report.\n(sec.8B-ssec.2) However, an application need not be accompanied by the information mentioned in subsection (1) if— the applicant is the holder of a contractor’s licence (an existing licence ) of a class other than the licence being applied for; and the licensee’s total actual revenue will not exceed the maximum revenue approved for the existing licence, if the licence the subject of the application is granted.\n(sec.8B-ssec.3) An application for a licence under section 33 of the Act must also be accompanied by the following information for the applicant’s professional indemnity insurance— a copy of the certificate of currency for the insurance; if the professional indemnity insurance does not comply with part 4B —a declaration, in the approved form, about the non-compliance; if the professional indemnity insurance complies with part 4B —a statutory declaration verifying compliance; if the insurance policy for the professional is arranged by an insurance broker—a receipt given by the broker for payment for the insurance.\n- (a) if the applicant’s proposed maximum revenue for a reporting year is not more than $800,000—a declaration in the approved form about the applicant’s compliance with the minimum financial requirements;\n- (b) if the applicant’s proposed maximum revenue for a reporting year is more than $800,000—an MFR report.\n- (a) the applicant is the holder of a contractor’s licence (an existing licence ) of a class other than the licence being applied for; and\n- (b) the licensee’s total actual revenue will not exceed the maximum revenue approved for the existing licence, if the licence the subject of the application is granted.\n- (a) a copy of the certificate of currency for the insurance;\n- (b) if the professional indemnity insurance does not comply with part 4B —a declaration, in the approved form, about the non-compliance;\n- (c) if the professional indemnity insurance complies with part 4B —a statutory declaration verifying compliance;\n- (d) if the insurance policy for the professional is arranged by an insurance broker—a receipt given by the broker for payment for the insurance.","sortOrder":16},{"sectionNumber":"pt.3-div.3","sectionType":"division","heading":"Financial information","content":"## Financial information","sortOrder":17},{"sectionNumber":"sec.9","sectionType":"section","heading":"What is financial information for a licensee","content":"### sec.9 What is financial information for a licensee\n\nThe financial information for a licensee is the following—\nfor a category SC1 or SC2 licensee, other than a licensee who is an individual—a declaration, in the approved form, about the licensee’s revenue and net tangible assets;\nfor a category 1, 2 or 3 licensee—the licensee’s internal management accounts;\nfor a category 4, 5, 6 or 7 licensee—signed financial statements.\ns 9 amd 2019 SL No. 30 s 12 ; 2025 SL No. 12 s 11\n- (a) for a category SC1 or SC2 licensee, other than a licensee who is an individual—a declaration, in the approved form, about the licensee’s revenue and net tangible assets;\n- (b) for a category 1, 2 or 3 licensee—the licensee’s internal management accounts;\n- (c) for a category 4, 5, 6 or 7 licensee—signed financial statements.","sortOrder":18},{"sectionNumber":"sec.9A","sectionType":"section","heading":"Licensee must give commission financial information","content":"### sec.9A Licensee must give commission financial information\n\nA licensee must, on or before the licensee’s annual reporting day, give the commission the licensee’s financial information for the most recent reporting year ending before the annual reporting day.\nMaximum penalty—20 penalty units.\ns 9A ins 2019 SL No. 30 s 13","sortOrder":19},{"sectionNumber":"sec.10","sectionType":"section","heading":"Licensee’s annual reporting day","content":"### sec.10 Licensee’s annual reporting day\n\nIf the commission grants a licence under the Act , the commission must, when the licence is granted, give the licensee a written notice stating the licensee’s annual reporting day.\nThe commission may, on application by the licensee, change the licensee’s annual reporting day.\nThis section does not apply if—\nthe commission grants a licence to which category SC1 or SC2 applies; and\nthe licensee is an individual.\ns 10 amd 2025 SL No. 12 s 12\n(sec.10-ssec.1) If the commission grants a licence under the Act , the commission must, when the licence is granted, give the licensee a written notice stating the licensee’s annual reporting day.\n(sec.10-ssec.2) The commission may, on application by the licensee, change the licensee’s annual reporting day.\n(sec.10-ssec.3) This section does not apply if— the commission grants a licence to which category SC1 or SC2 applies; and the licensee is an individual.\n- (a) the commission grants a licence to which category SC1 or SC2 applies; and\n- (b) the licensee is an individual.","sortOrder":20},{"sectionNumber":"sec.11","sectionType":"section","heading":"Licensee must give commission copies of particular reports","content":"### sec.11 Licensee must give commission copies of particular reports\n\nThis section applies if a licensee is required to do either of the following—\nlodge a report under the Corporations Act , section 319 for a reporting year;\ngive the ASX copies of ASX annual documents for a reporting year.\nWhen the licensee complies with the requirement, the licensee must also give the commission a copy of the report or documents.\nIf the licensee complies with subsection (2) , the licensee is taken to have complied with section 9A for the reporting year.\nIn this section—\nASX means ASX Limited ACN 008 624 691.\nASX annual documents means the annual documents required to be given to the ASX under chapter 4 , section 4 .5 of the ASX listing rules.\nASX listing rules means rules made by the ASX for the listing of corporations on the Australian stock exchange.\ns 11 sub 2019 SL No. 30 s 14\n(sec.11-ssec.1) This section applies if a licensee is required to do either of the following— lodge a report under the Corporations Act , section 319 for a reporting year; give the ASX copies of ASX annual documents for a reporting year.\n(sec.11-ssec.2) When the licensee complies with the requirement, the licensee must also give the commission a copy of the report or documents.\n(sec.11-ssec.3) If the licensee complies with subsection (2) , the licensee is taken to have complied with section 9A for the reporting year.\n(sec.11-ssec.4) In this section— ASX means ASX Limited ACN 008 624 691. ASX annual documents means the annual documents required to be given to the ASX under chapter 4 , section 4 .5 of the ASX listing rules. ASX listing rules means rules made by the ASX for the listing of corporations on the Australian stock exchange.\n- (a) lodge a report under the Corporations Act , section 319 for a reporting year;\n- (b) give the ASX copies of ASX annual documents for a reporting year.","sortOrder":21},{"sectionNumber":"pt.3-div.4","sectionType":"division","heading":"MFR reports","content":"## MFR reports","sortOrder":22},{"sectionNumber":"sec.11A","sectionType":"section","heading":"Licensee must ensure MFR report is prepared by qualified accountant","content":"### sec.11A Licensee must ensure MFR report is prepared by qualified accountant\n\nA licensee must ensure an MFR report for the licensee is prepared by a qualified accountant.\ns 11A ins 2019 SL No. 30 s 15","sortOrder":23},{"sectionNumber":"sec.11B","sectionType":"section","heading":"Requirement to give replacement MFR report","content":"### sec.11B Requirement to give replacement MFR report\n\nThis section applies if the licensee becomes aware that the most recent MFR report given by the licensee to the commission contains information that is incorrect in a material particular.\na calculation error affecting amounts used to work out net tangible assets\na mistake resulting from applying the prescribed accounting standards incorrectly\na statement based on a misinterpretation of facts\na statement or calculation based on circumstances that have changed or that the licensee was not aware of previously\nFor subsection (1) , information is not incorrect in a material particular only because it is a minor error or other matter that, if a change were made to the report to correct the error or matter, would not be a change of substance.\nThe licensee must, as soon as the licensee becomes aware, or ought reasonably to be aware, of the matter mentioned in subsection (1) , give the commission notice of the matter.\nMaximum penalty—20 penalty units.\nAlso, the licensee must, as soon as practicable after giving notice under subsection (3) , give the commission a new MFR report.\nMaximum penalty—20 penalty units.\nThe new MFR report must indicate all changes made since the last MFR report given by the licensee to the commission.\ns 11B ins 2019 SL No. 30 s 15\n(sec.11B-ssec.1) This section applies if the licensee becomes aware that the most recent MFR report given by the licensee to the commission contains information that is incorrect in a material particular. a calculation error affecting amounts used to work out net tangible assets a mistake resulting from applying the prescribed accounting standards incorrectly a statement based on a misinterpretation of facts a statement or calculation based on circumstances that have changed or that the licensee was not aware of previously\n(sec.11B-ssec.2) For subsection (1) , information is not incorrect in a material particular only because it is a minor error or other matter that, if a change were made to the report to correct the error or matter, would not be a change of substance.\n(sec.11B-ssec.3) The licensee must, as soon as the licensee becomes aware, or ought reasonably to be aware, of the matter mentioned in subsection (1) , give the commission notice of the matter. Maximum penalty—20 penalty units.\n(sec.11B-ssec.4) Also, the licensee must, as soon as practicable after giving notice under subsection (3) , give the commission a new MFR report. Maximum penalty—20 penalty units.\n(sec.11B-ssec.5) The new MFR report must indicate all changes made since the last MFR report given by the licensee to the commission.\n- • a calculation error affecting amounts used to work out net tangible assets\n- • a mistake resulting from applying the prescribed accounting standards incorrectly\n- • a statement based on a misinterpretation of facts\n- • a statement or calculation based on circumstances that have changed or that the licensee was not aware of previously","sortOrder":24},{"sectionNumber":"sec.11C","sectionType":"section","heading":"Information contained in MFR report must be current","content":"### sec.11C Information contained in MFR report must be current\n\nThe information contained in an MFR report must be no more than 4 months old as at the day the report is signed by a qualified accountant.\nAn MFR report must be signed by a qualified accountant no more than 30 days before the day the report is given to the commission.\ns 11C ins 2019 SL No. 30 s 15\n(sec.11C-ssec.1) The information contained in an MFR report must be no more than 4 months old as at the day the report is signed by a qualified accountant.\n(sec.11C-ssec.2) An MFR report must be signed by a qualified accountant no more than 30 days before the day the report is given to the commission.","sortOrder":25},{"sectionNumber":"sec.11D","sectionType":"section","heading":"Requirements for MFR report for particular licensees","content":"### sec.11D Requirements for MFR report for particular licensees\n\nThis section applies in relation to an MFR report for a category SC1, SC2, 1, 2 or 3 licensee that is required to be given to the commission.\nDespite section 8 (2) , the signed financial statements included in the MFR report need only comply with—\nthe following prescribed accounting standards—\nAustralian Accounting Standard AASB 101;\nAustralian Accounting Standard AASB 107;\nAustralian Accounting Standard AASB 108;\nAustralian Accounting Standard AASB 1048; and\nif another Australian Accounting Standard applies in relation to the licensee’s financial position—the recognition and measurement requirements under the other Standard.\ns 11D prev s 11D ins 2019 SL No. 30 s 15\nom 2020 SL No. 241 s 21\npres s 11D ins 2024 SL No. 6 s 4\n(sec.11D-ssec.1) This section applies in relation to an MFR report for a category SC1, SC2, 1, 2 or 3 licensee that is required to be given to the commission.\n(sec.11D-ssec.2) Despite section 8 (2) , the signed financial statements included in the MFR report need only comply with— the following prescribed accounting standards— Australian Accounting Standard AASB 101; Australian Accounting Standard AASB 107; Australian Accounting Standard AASB 108; Australian Accounting Standard AASB 1048; and if another Australian Accounting Standard applies in relation to the licensee’s financial position—the recognition and measurement requirements under the other Standard.\n- (a) the following prescribed accounting standards— (i) Australian Accounting Standard AASB 101; (ii) Australian Accounting Standard AASB 107; (iii) Australian Accounting Standard AASB 108; (iv) Australian Accounting Standard AASB 1048; and\n- (i) Australian Accounting Standard AASB 101;\n- (ii) Australian Accounting Standard AASB 107;\n- (iii) Australian Accounting Standard AASB 108;\n- (iv) Australian Accounting Standard AASB 1048; and\n- (b) if another Australian Accounting Standard applies in relation to the licensee’s financial position—the recognition and measurement requirements under the other Standard.\n- (i) Australian Accounting Standard AASB 101;\n- (ii) Australian Accounting Standard AASB 107;\n- (iii) Australian Accounting Standard AASB 108;\n- (iv) Australian Accounting Standard AASB 1048; and","sortOrder":26},{"sectionNumber":"pt.3-div.5","sectionType":"division","heading":"Additional requirements","content":"## Additional requirements","sortOrder":27},{"sectionNumber":"sec.11E","sectionType":"section","heading":"Licensee must keep internal management accounts","content":"### sec.11E Licensee must keep internal management accounts\n\nA licensee must prepare internal management accounts for each quarter of the licensee’s reporting year.\nThe commission may, by written notice, ask the licensee to give the commission a copy of the licensee’s internal management accounts.\nThe licensee must comply with the written notice within 14 days after the licensee receives the notice, unless the licensee has a reasonable excuse.\nMaximum penalty—20 penalty units.\nThis section does not apply to an applicant.\ns 11E ins 2019 SL No. 30 s 15\n(sec.11E-ssec.1) A licensee must prepare internal management accounts for each quarter of the licensee’s reporting year.\n(sec.11E-ssec.2) The commission may, by written notice, ask the licensee to give the commission a copy of the licensee’s internal management accounts.\n(sec.11E-ssec.3) The licensee must comply with the written notice within 14 days after the licensee receives the notice, unless the licensee has a reasonable excuse. Maximum penalty—20 penalty units.\n(sec.11E-ssec.4) This section does not apply to an applicant.","sortOrder":28},{"sectionNumber":"sec.11F","sectionType":"section","heading":"Licensee must give commission information about significant change to business","content":"### sec.11F Licensee must give commission information about significant change to business\n\nThis section applies if there is a significant change to the business carried out under a licence.\nThe licensee for the licence must, as soon as practicable, give the commission—\nfor a category SC1 or SC2 licensee—a declaration, in the approved form, about the licensee’s compliance with the minimum financial requirements; or\nfor another category of licensee—an MFR report.\nIn this section—\nsignificant change , to a business, means a change to the structure of the business that may impact its financial position, including the following—\na change of ownership of the business;\nif the licensee is a corporation—a change to an executive officer of the corporation;\nif the licensee carries on business in a partnership—a change to the partners in the partnership, or another substantial change to the partnership agreement;\nif the licensee is a trustee of a trust—a change to the trustees of the trust, or a substantial change to the trust instrument.\ns 11F ins 2019 SL No. 30 s 15\n(sec.11F-ssec.1) This section applies if there is a significant change to the business carried out under a licence.\n(sec.11F-ssec.2) The licensee for the licence must, as soon as practicable, give the commission— for a category SC1 or SC2 licensee—a declaration, in the approved form, about the licensee’s compliance with the minimum financial requirements; or for another category of licensee—an MFR report.\n(sec.11F-ssec.3) In this section— significant change , to a business, means a change to the structure of the business that may impact its financial position, including the following— a change of ownership of the business; if the licensee is a corporation—a change to an executive officer of the corporation; if the licensee carries on business in a partnership—a change to the partners in the partnership, or another substantial change to the partnership agreement; if the licensee is a trustee of a trust—a change to the trustees of the trust, or a substantial change to the trust instrument.\n- (a) for a category SC1 or SC2 licensee—a declaration, in the approved form, about the licensee’s compliance with the minimum financial requirements; or\n- (b) for another category of licensee—an MFR report.\n- (a) a change of ownership of the business;\n- (b) if the licensee is a corporation—a change to an executive officer of the corporation;\n- (c) if the licensee carries on business in a partnership—a change to the partners in the partnership, or another substantial change to the partnership agreement;\n- (d) if the licensee is a trustee of a trust—a change to the trustees of the trust, or a substantial change to the trust instrument.","sortOrder":29},{"sectionNumber":"sec.11G","sectionType":"section","heading":"Commission may require category SC1 or SC2 licensees to give MFR report","content":"### sec.11G Commission may require category SC1 or SC2 licensees to give MFR report\n\nThe commission may, by written notice, ask a category SC1 or SC2 licensee to give the commission an MFR report.\nThe notice must state a reasonable time of at least 21 days within which the MFR report must be given.\nThe licensee must comply with the notice unless the licensee has a reasonable excuse.\nMaximum penalty—20 penalty units.\ns 11G ins 2019 SL No. 30 s 15\n(sec.11G-ssec.1) The commission may, by written notice, ask a category SC1 or SC2 licensee to give the commission an MFR report.\n(sec.11G-ssec.2) The notice must state a reasonable time of at least 21 days within which the MFR report must be given.\n(sec.11G-ssec.3) The licensee must comply with the notice unless the licensee has a reasonable excuse. Maximum penalty—20 penalty units.","sortOrder":30},{"sectionNumber":"pt.3A","sectionType":"part","heading":"Licensee categories","content":"# Licensee categories","sortOrder":31},{"sectionNumber":"sec.11H","sectionType":"section","heading":"Categories","content":"### sec.11H Categories\n\nA licensee who has the following maximum revenue for a reporting year has the category stated for the amount for the reporting year—\nfor a maximum revenue of not more than $200,000—SC1;\nfor a maximum revenue of more than $200,000 but not more than $800,000—SC2;\nfor a maximum revenue of more than $800,000 but not more than $3M—category 1;\nfor a maximum revenue of more than $3M but not more than $12M—category 2;\nfor a maximum revenue of more than $12M but not more than $30M—category 3;\nfor a maximum revenue of more than $30M but not more than $60M—category 4;\nfor a maximum revenue of more than $60M but not more than $120M—category 5;\nfor a maximum revenue of more than $120M but not more than $240M—category 6;\nfor a maximum revenue of more than $240M—category 7.\ns 11H ins 2019 SL No. 30 s 16\n- (a) for a maximum revenue of not more than $200,000—SC1;\n- (b) for a maximum revenue of more than $200,000 but not more than $800,000—SC2;\n- (c) for a maximum revenue of more than $800,000 but not more than $3M—category 1;\n- (d) for a maximum revenue of more than $3M but not more than $12M—category 2;\n- (e) for a maximum revenue of more than $12M but not more than $30M—category 3;\n- (f) for a maximum revenue of more than $30M but not more than $60M—category 4;\n- (g) for a maximum revenue of more than $60M but not more than $120M—category 5;\n- (h) for a maximum revenue of more than $120M but not more than $240M—category 6;\n- (i) for a maximum revenue of more than $240M—category 7.","sortOrder":32},{"sectionNumber":"sec.11I","sectionType":"section","heading":"Restriction on holders of builder contractor’s licenses","content":"### sec.11I Restriction on holders of builder contractor’s licenses\n\nA licensee for a builder contractor’s licence under the Queensland Building and Construction Commission Regulation 2018 must not have a category of SC1.\ns 11I ins 2019 SL No. 30 s 16","sortOrder":33},{"sectionNumber":"pt.3B","sectionType":"part","heading":"Maximum revenue","content":"# Maximum revenue","sortOrder":34},{"sectionNumber":"sec.11J","sectionType":"section","heading":"What is a licensee’s maximum revenue","content":"### sec.11J What is a licensee’s maximum revenue\n\nA licensee’s maximum revenue for a reporting year is—\nthe amount worked out under section 11K for the licensee (the calculated maximum revenue ); or\nan amount, nominated by the licensee, that is less than the licensee’s calculated maximum revenue.\nHowever, if the licensee’s maximum revenue is changed under section 11M or reduced under section 11N , the licensee’s maximum revenue for the reporting year is the amount as changed or reduced, and notified to the licensee under section 17O .\ns 11J ins 2019 SL No. 30 s 16\n(sec.11J-ssec.1) A licensee’s maximum revenue for a reporting year is— the amount worked out under section 11K for the licensee (the calculated maximum revenue ); or an amount, nominated by the licensee, that is less than the licensee’s calculated maximum revenue.\n(sec.11J-ssec.2) However, if the licensee’s maximum revenue is changed under section 11M or reduced under section 11N , the licensee’s maximum revenue for the reporting year is the amount as changed or reduced, and notified to the licensee under section 17O .\n- (a) the amount worked out under section 11K for the licensee (the calculated maximum revenue ); or\n- (b) an amount, nominated by the licensee, that is less than the licensee’s calculated maximum revenue.","sortOrder":35},{"sectionNumber":"sec.11K","sectionType":"section","heading":"Working out calculated maximum revenue","content":"### sec.11K Working out calculated maximum revenue\n\nThe calculated maximum revenue for a licensee for a reporting year is the amount worked out for the licensee under schedule 1 .\ns 11K ins 2019 SL No. 30 s 16","sortOrder":36},{"sectionNumber":"sec.11L","sectionType":"section","heading":"Licensee’s obligation if actual revenue may exceed maximum revenue","content":"### sec.11L Licensee’s obligation if actual revenue may exceed maximum revenue\n\nIf a licensee’s actual revenue, for a reporting year, is likely to exceed the licensee’s maximum revenue for the year by more than 10%, the licensee must, before the actual revenue exceeds the maximum revenue, apply to the commission under section 11M to increase the licensee’s maximum revenue.\ns 11L ins 2019 SL No. 30 s 16","sortOrder":37},{"sectionNumber":"sec.11M","sectionType":"section","heading":"Application to change maximum revenue","content":"### sec.11M Application to change maximum revenue\n\nA licensee may apply to the commission at any time to change the licensee’s maximum revenue.\nThe application must be—\nin the approved form; and\naccompanied by—\nfor a category SC1 or SC2 licensee—a declaration in the approved form; or\notherwise—an MFR report.\nThe commission may approve the application if satisfied the amount of the licensee’s net tangible assets is sufficient to support the proposed maximum revenue.\ns 11M ins 2019 SL No. 30 s 16\n(sec.11M-ssec.1) A licensee may apply to the commission at any time to change the licensee’s maximum revenue.\n(sec.11M-ssec.2) The application must be— in the approved form; and accompanied by— for a category SC1 or SC2 licensee—a declaration in the approved form; or otherwise—an MFR report.\n(sec.11M-ssec.3) The commission may approve the application if satisfied the amount of the licensee’s net tangible assets is sufficient to support the proposed maximum revenue.\n- (a) in the approved form; and\n- (b) accompanied by— (i) for a category SC1 or SC2 licensee—a declaration in the approved form; or (ii) otherwise—an MFR report.\n- (i) for a category SC1 or SC2 licensee—a declaration in the approved form; or\n- (ii) otherwise—an MFR report.\n- (i) for a category SC1 or SC2 licensee—a declaration in the approved form; or\n- (ii) otherwise—an MFR report.","sortOrder":38},{"sectionNumber":"sec.11N","sectionType":"section","heading":"Commission may reduce maximum revenue","content":"### sec.11N Commission may reduce maximum revenue\n\nThis section applies if the commission becomes aware the amount of net tangible assets of a licensee has reduced in a way that will reduce the licensee’s calculated maximum revenue.\nThe commission may reduce the licensee’s maximum revenue to the amount of the calculated maximum revenue worked out based on the licensee’s reduced net tangible assets.\ns 11N ins 2019 SL No. 30 s 16\n(sec.11N-ssec.1) This section applies if the commission becomes aware the amount of net tangible assets of a licensee has reduced in a way that will reduce the licensee’s calculated maximum revenue.\n(sec.11N-ssec.2) The commission may reduce the licensee’s maximum revenue to the amount of the calculated maximum revenue worked out based on the licensee’s reduced net tangible assets.","sortOrder":39},{"sectionNumber":"sec.11O","sectionType":"section","heading":"Working out actual revenue—particular classes of licensee","content":"### sec.11O Working out actual revenue—particular classes of licensee\n\nThis section applies to the following licensees—\na construction manager;\na project manager;\nthe holder of a building design licence mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 , part 11 , 12 or 13 .\nIf the licensee carries out building work under a contract that is a part of a wider project of building work, for working out the licensee’s actual revenue only the amount payable to the licensee under the contract is to be included.\ns 11O ins 2019 SL No. 30 s 16\n(sec.11O-ssec.1) This section applies to the following licensees— a construction manager; a project manager; the holder of a building design licence mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 , part 11 , 12 or 13 .\n(sec.11O-ssec.2) If the licensee carries out building work under a contract that is a part of a wider project of building work, for working out the licensee’s actual revenue only the amount payable to the licensee under the contract is to be included.\n- (a) a construction manager;\n- (b) a project manager;\n- (c) the holder of a building design licence mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 , part 11 , 12 or 13 .","sortOrder":40},{"sectionNumber":"sec.11P","sectionType":"section","heading":"Working out actual revenue—trustees, partnerships or group companies","content":"### sec.11P Working out actual revenue—trustees, partnerships or group companies\n\nIf a licensee is a trustee of a trust, the licensee’s actual revenue includes all revenue received by the trust.\nIf a licensee carries on business in a partnership, the licensee’s actual revenue includes all revenue received by the partnership.\nIf a licensee is a group company, the licensee’s actual revenue is the revenue received by the corporate group for the group company.\ns 11P ins 2019 SL No. 30 s 16\namd 2020 SL No. 241 s 22 ; 2024 SL No. 85 s 10\n(sec.11P-ssec.1) If a licensee is a trustee of a trust, the licensee’s actual revenue includes all revenue received by the trust.\n(sec.11P-ssec.2) If a licensee carries on business in a partnership, the licensee’s actual revenue includes all revenue received by the partnership.\n(sec.11P-ssec.3) If a licensee is a group company, the licensee’s actual revenue is the revenue received by the corporate group for the group company.","sortOrder":41},{"sectionNumber":"sec.11Q","sectionType":"section","heading":"Amounts to be disregarded for working out actual revenue","content":"### sec.11Q Amounts to be disregarded for working out actual revenue\n\nFor working out a licensee’s actual revenue, the following amounts are to be disregarded—\namounts received by the licensee as the licensee’s salary or wages;\nan amount received for GST payable by the licensee.\ns 11Q ins 2019 SL No. 30 s 16\n- (a) amounts received by the licensee as the licensee’s salary or wages;\n- (b) an amount received for GST payable by the licensee.","sortOrder":42},{"sectionNumber":"pt.4","sectionType":"part","heading":"Net tangible assets","content":"# Net tangible assets","sortOrder":43},{"sectionNumber":"pt.4-div.1","sectionType":"division","heading":"Requirements for holding net tangible assets","content":"## Requirements for holding net tangible assets","sortOrder":44},{"sectionNumber":"sec.12","sectionType":"section","heading":"Requirement to hold minimum amount of net tangible assets","content":"### sec.12 Requirement to hold minimum amount of net tangible assets\n\nA licensee must hold net tangible assets, excluding any deed of covenant asset, of not less than $0.\nAlso, a licensee must, at all times, unless the licensee has a reasonable excuse, hold at least the net tangible assets, including any deed of covenant asset, worked out for the licensee under schedule 1 , part 2 .\nA licensee for a builder contractor’s licence under the Queensland Building and Construction Commission Regulation 2018 , must hold net tangible assets of at least $46,000.\ns 12 sub 2019 SL No. 30 s 17\n(sec.12-ssec.1) A licensee must hold net tangible assets, excluding any deed of covenant asset, of not less than $0.\n(sec.12-ssec.2) Also, a licensee must, at all times, unless the licensee has a reasonable excuse, hold at least the net tangible assets, including any deed of covenant asset, worked out for the licensee under schedule 1 , part 2 .\n(sec.12-ssec.3) A licensee for a builder contractor’s licence under the Queensland Building and Construction Commission Regulation 2018 , must hold net tangible assets of at least $46,000.","sortOrder":45},{"sectionNumber":"pt.4-div.2","sectionType":"division","heading":"When licensee must give information","content":"## When licensee must give information","sortOrder":46},{"sectionNumber":"sec.13","sectionType":"section","heading":"Licensees must give commission information about particular decreases in net tangible assets","content":"### sec.13 Licensees must give commission information about particular decreases in net tangible assets\n\nThis section applies to a licensee if—\nthe licensee has given the commission written notice of the licensee’s net tangible assets; and\nA licensee may have notified the commission of the licensee’s net tangible assets in the licensee’s application for a licence or when complying with a requirement under an approved audit program or other requirement to give financial information under the Act .\nthe commission has given the licensee a written notice that the commission accepts the net tangible assets notified under paragraph (a) (the accepted NTA ); and\nthe licensee’s net tangible assets decrease by more than—\nfor a category SC1, SC2, 1, 2 or 3 licensee—30% below the licensee’s most recent accepted NTA; or\nfor any other licensee—20% below the licensee’s most recent accepted NTA.\nThe licensee must, within 30 days after the licensee becomes aware, or ought reasonably to have become aware, of the decrease, give the commission—\nfor a category SC1 or SC2 licensee—a declaration about the decrease in the approved form; or\notherwise—an MFR report for the licensee.\nMaximum penalty—20 penalty units.\ns 13 amd 2019 SL No. 30 s 18\n(sec.13-ssec.1) This section applies to a licensee if— the licensee has given the commission written notice of the licensee’s net tangible assets; and A licensee may have notified the commission of the licensee’s net tangible assets in the licensee’s application for a licence or when complying with a requirement under an approved audit program or other requirement to give financial information under the Act . the commission has given the licensee a written notice that the commission accepts the net tangible assets notified under paragraph (a) (the accepted NTA ); and the licensee’s net tangible assets decrease by more than— for a category SC1, SC2, 1, 2 or 3 licensee—30% below the licensee’s most recent accepted NTA; or for any other licensee—20% below the licensee’s most recent accepted NTA.\n(sec.13-ssec.2) The licensee must, within 30 days after the licensee becomes aware, or ought reasonably to have become aware, of the decrease, give the commission— for a category SC1 or SC2 licensee—a declaration about the decrease in the approved form; or otherwise—an MFR report for the licensee. Maximum penalty—20 penalty units.\n- (a) the licensee has given the commission written notice of the licensee’s net tangible assets; and Examples of how a licensee may have notified the commission— A licensee may have notified the commission of the licensee’s net tangible assets in the licensee’s application for a licence or when complying with a requirement under an approved audit program or other requirement to give financial information under the Act .\n- (b) the commission has given the licensee a written notice that the commission accepts the net tangible assets notified under paragraph (a) (the accepted NTA ); and\n- (c) the licensee’s net tangible assets decrease by more than— (i) for a category SC1, SC2, 1, 2 or 3 licensee—30% below the licensee’s most recent accepted NTA; or (ii) for any other licensee—20% below the licensee’s most recent accepted NTA.\n- (i) for a category SC1, SC2, 1, 2 or 3 licensee—30% below the licensee’s most recent accepted NTA; or\n- (ii) for any other licensee—20% below the licensee’s most recent accepted NTA.\n- (i) for a category SC1, SC2, 1, 2 or 3 licensee—30% below the licensee’s most recent accepted NTA; or\n- (ii) for any other licensee—20% below the licensee’s most recent accepted NTA.\n- (a) for a category SC1 or SC2 licensee—a declaration about the decrease in the approved form; or\n- (b) otherwise—an MFR report for the licensee.","sortOrder":47},{"sectionNumber":"pt.4-div.3","sectionType":"division","heading":"Working out net tangible assets","content":"## Working out net tangible assets","sortOrder":48},{"sectionNumber":"sec.14","sectionType":"section","heading":"Meaning of net tangible assets of a licensee","content":"### sec.14 Meaning of net tangible assets of a licensee\n\nThe net tangible assets of a licensee is the amount worked out by subtracting all of the following amounts from the total amount of assets of the licensee under section 15 —\nthe total amount of the licensee’s liabilities;\nthe total amount of the licensee’s intangible assets worked out under the prescribed accounting standards;\nAustralian Accounting Standard AASB 138\nAustralian Accounting Standard AASB 3\nAustralian Accounting Standard AASB 112\nAustralian Accounting Standard AASB 123\nthe total amount of the licensee’s disallowed assets under section 17 .\ns 14 amd 2019 SL No. 30 s 19 ; 2019 SL No. 100 s 4\n- (a) the total amount of the licensee’s liabilities;\n- (b) the total amount of the licensee’s intangible assets worked out under the prescribed accounting standards; Examples— • Australian Accounting Standard AASB 138 • Australian Accounting Standard AASB 3 • Australian Accounting Standard AASB 112 • Australian Accounting Standard AASB 123\n- • Australian Accounting Standard AASB 138\n- • Australian Accounting Standard AASB 3\n- • Australian Accounting Standard AASB 112\n- • Australian Accounting Standard AASB 123\n- (c) the total amount of the licensee’s disallowed assets under section 17 .\n- • Australian Accounting Standard AASB 138\n- • Australian Accounting Standard AASB 3\n- • Australian Accounting Standard AASB 112\n- • Australian Accounting Standard AASB 123","sortOrder":49},{"sectionNumber":"sec.15","sectionType":"section","heading":"Working out licensee’s assets","content":"### sec.15 Working out licensee’s assets\n\nA licensee’s assets include the following—\ncash;\nan amount payable to the licensee for building work, construction work or building work services carried out by the licensee under a building contract for which the licensee has not yet been paid;\nthe full amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount 180 days or less before the day the assets are worked out;\nhalf of the amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount more than 180 days, but less than 1 year, before the day the assets are worked out;\nthe value of inventory;\nan investment made by the licensee, if the terms of the investment allow it to be converted to cash on the day the assets are worked out;\nan investment valued using the equity method under Australian Accounting Standard AASB 128 for a general purpose financial report under the Australian Accounting Standards;\nthe value of a motor vehicle;\nplant and equipment valued at carrying amount under Australian Accounting Standard AASB 116;\nthe value of real property;\na loan given by the licensee to a related entity if, on the day the licensee’s assets are worked out, the related entity—\nholds net tangible assets in its own right, excluding any deed of covenant asset, of at least $0; and\nhas a current ratio of at least 1;\nthe value of shares in companies listed on a stock exchange;\nthe value of tools of trade;\nthe amount of a deed of covenant asset, if division 4 is complied with for the deed.\nFor subsection (1) (k) (i) , the net tangible assets of a related entity must be worked out under this division as if a reference to a licensee were a reference to the related entity.\nIn this section—\nvalue , of an asset, means the value of the asset worked out under the Australian Accounting Standards.\ns 15 amd 2019 SL No. 30 s 20 ; 2020 SL No. 241 s 23 ; 2024 SL No. 85 s 11\n(sec.15-ssec.1) A licensee’s assets include the following— cash; an amount payable to the licensee for building work, construction work or building work services carried out by the licensee under a building contract for which the licensee has not yet been paid; the full amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount 180 days or less before the day the assets are worked out; half of the amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount more than 180 days, but less than 1 year, before the day the assets are worked out; the value of inventory; an investment made by the licensee, if the terms of the investment allow it to be converted to cash on the day the assets are worked out; an investment valued using the equity method under Australian Accounting Standard AASB 128 for a general purpose financial report under the Australian Accounting Standards; the value of a motor vehicle; plant and equipment valued at carrying amount under Australian Accounting Standard AASB 116; the value of real property; a loan given by the licensee to a related entity if, on the day the licensee’s assets are worked out, the related entity— holds net tangible assets in its own right, excluding any deed of covenant asset, of at least $0; and has a current ratio of at least 1; the value of shares in companies listed on a stock exchange; the value of tools of trade; the amount of a deed of covenant asset, if division 4 is complied with for the deed.\n(sec.15-ssec.2) For subsection (1) (k) (i) , the net tangible assets of a related entity must be worked out under this division as if a reference to a licensee were a reference to the related entity.\n(sec.15-ssec.3) In this section— value , of an asset, means the value of the asset worked out under the Australian Accounting Standards.\n- (a) cash;\n- (b) an amount payable to the licensee for building work, construction work or building work services carried out by the licensee under a building contract for which the licensee has not yet been paid;\n- (c) the full amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount 180 days or less before the day the assets are worked out;\n- (d) half of the amount owing to the licensee by a debtor, if the debtor has been given an invoice for the amount more than 180 days, but less than 1 year, before the day the assets are worked out;\n- (e) the value of inventory;\n- (f) an investment made by the licensee, if the terms of the investment allow it to be converted to cash on the day the assets are worked out;\n- (g) an investment valued using the equity method under Australian Accounting Standard AASB 128 for a general purpose financial report under the Australian Accounting Standards;\n- (h) the value of a motor vehicle;\n- (i) plant and equipment valued at carrying amount under Australian Accounting Standard AASB 116;\n- (j) the value of real property;\n- (k) a loan given by the licensee to a related entity if, on the day the licensee’s assets are worked out, the related entity— (i) holds net tangible assets in its own right, excluding any deed of covenant asset, of at least $0; and (ii) has a current ratio of at least 1;\n- (i) holds net tangible assets in its own right, excluding any deed of covenant asset, of at least $0; and\n- (ii) has a current ratio of at least 1;\n- (l) the value of shares in companies listed on a stock exchange;\n- (m) the value of tools of trade;\n- (n) the amount of a deed of covenant asset, if division 4 is complied with for the deed.\n- (i) holds net tangible assets in its own right, excluding any deed of covenant asset, of at least $0; and\n- (ii) has a current ratio of at least 1;","sortOrder":50},{"sectionNumber":"sec.16","sectionType":"section","heading":"Working out a licensee’s liabilities","content":"### sec.16 Working out a licensee’s liabilities\n\nA licensee’s liabilities include—\nan amount owing by the licensee to a related entity; and\nthe amount of a deficiency in trust assets of a trust for which the licensee is a trustee; and\nthe full amount of a loan for which the licensee is in default if the lender has not waived its rights in relation to the default.\nThe trust assets of a trust mentioned in subsection (1) (b) must be worked out under this division as if—\na reference to net tangible assets were a reference to trust assets; and\na reference to a licensee were a reference to the trustee of the trust.\ns 16 amd 2019 SL No. 100 s 5\n(sec.16-ssec.1) A licensee’s liabilities include— an amount owing by the licensee to a related entity; and the amount of a deficiency in trust assets of a trust for which the licensee is a trustee; and the full amount of a loan for which the licensee is in default if the lender has not waived its rights in relation to the default.\n(sec.16-ssec.2) The trust assets of a trust mentioned in subsection (1) (b) must be worked out under this division as if— a reference to net tangible assets were a reference to trust assets; and a reference to a licensee were a reference to the trustee of the trust.\n- (a) an amount owing by the licensee to a related entity; and\n- (b) the amount of a deficiency in trust assets of a trust for which the licensee is a trustee; and\n- (c) the full amount of a loan for which the licensee is in default if the lender has not waived its rights in relation to the default.\n- (a) a reference to net tangible assets were a reference to trust assets; and\n- (b) a reference to a licensee were a reference to the trustee of the trust.","sortOrder":51},{"sectionNumber":"sec.17","sectionType":"section","heading":"Working out a licensee’s disallowed assets","content":"### sec.17 Working out a licensee’s disallowed assets\n\nThe following are disallowed assets of a licensee—\na recreational vehicle;\nan unregistered vehicle;\na racehorse;\na collectors item;\npaintings, stamps, coins\ncontingent assets under Australian Accounting Standard AASB 137;\nfurniture used solely or predominantly for a personal purpose;\ninvestments in, or shares of, companies other than companies listed on a stock exchange;\ninvestments valued using the equity method under Australian Accounting Standard AASB 128 for a special purpose financial statement under the Australian Accounting Standards;\nnon-monetary credits, including, for example, goods or services owed to the licensee in exchange for other goods or services;\nassets held on trust by the licensee for a beneficiary other than the licensee;\nunits in trusts that are not listed on a stock exchange;\nsuperannuation benefits that can not be accessed by the licensee on the day the disallowed assets are worked out;\nlife or income protection insurance policy benefits;\nan amount owing to the licensee by a debtor, if an invoice for the amount has been given to the debtor more than 1 year from the day the disallowed assets are worked out;\na deed of covenant asset for which the licensee is the covenantor under the deed.\nIn this section—\nrecreational vehicle means the following—\na motorbike under Transport Operations (Road Use Management) Act 1995 , schedule 4 , that is designed to be used off-road;\na quad bike under the Queensland Road Rules , schedule 5 ;\na motorised golf buggy under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 ;\na ship under the Transport Operations (Marine Safety) Act 1994 , section 10 ;\na personal watercraft under the Transport Operations (Marine Safety) Act 1994 , schedule 1 ;\nan aircraft under the Air Navigation Act 1937 , section 4 ;\na racing vehicle under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 .\nunregistered vehicle see the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , section 7 (2) .\ns 17 amd 2019 SL No. 30 s 21 ; 2021 SL No. 113 s 270\n(sec.17-ssec.1) The following are disallowed assets of a licensee— a recreational vehicle; an unregistered vehicle; a racehorse; a collectors item; paintings, stamps, coins contingent assets under Australian Accounting Standard AASB 137; furniture used solely or predominantly for a personal purpose; investments in, or shares of, companies other than companies listed on a stock exchange; investments valued using the equity method under Australian Accounting Standard AASB 128 for a special purpose financial statement under the Australian Accounting Standards; non-monetary credits, including, for example, goods or services owed to the licensee in exchange for other goods or services; assets held on trust by the licensee for a beneficiary other than the licensee; units in trusts that are not listed on a stock exchange; superannuation benefits that can not be accessed by the licensee on the day the disallowed assets are worked out; life or income protection insurance policy benefits; an amount owing to the licensee by a debtor, if an invoice for the amount has been given to the debtor more than 1 year from the day the disallowed assets are worked out; a deed of covenant asset for which the licensee is the covenantor under the deed.\n(sec.17-ssec.2) In this section— recreational vehicle means the following— a motorbike under Transport Operations (Road Use Management) Act 1995 , schedule 4 , that is designed to be used off-road; a quad bike under the Queensland Road Rules , schedule 5 ; a motorised golf buggy under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 ; a ship under the Transport Operations (Marine Safety) Act 1994 , section 10 ; a personal watercraft under the Transport Operations (Marine Safety) Act 1994 , schedule 1 ; an aircraft under the Air Navigation Act 1937 , section 4 ; a racing vehicle under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 . unregistered vehicle see the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , section 7 (2) .\n- (a) a recreational vehicle;\n- (b) an unregistered vehicle;\n- (c) a racehorse;\n- (d) a collectors item; Examples— paintings, stamps, coins\n- (e) contingent assets under Australian Accounting Standard AASB 137;\n- (f) furniture used solely or predominantly for a personal purpose;\n- (g) investments in, or shares of, companies other than companies listed on a stock exchange;\n- (h) investments valued using the equity method under Australian Accounting Standard AASB 128 for a special purpose financial statement under the Australian Accounting Standards;\n- (i) non-monetary credits, including, for example, goods or services owed to the licensee in exchange for other goods or services;\n- (j) assets held on trust by the licensee for a beneficiary other than the licensee;\n- (k) units in trusts that are not listed on a stock exchange;\n- (l) superannuation benefits that can not be accessed by the licensee on the day the disallowed assets are worked out;\n- (m) life or income protection insurance policy benefits;\n- (n) an amount owing to the licensee by a debtor, if an invoice for the amount has been given to the debtor more than 1 year from the day the disallowed assets are worked out;\n- (o) a deed of covenant asset for which the licensee is the covenantor under the deed.\n- (a) a motorbike under Transport Operations (Road Use Management) Act 1995 , schedule 4 , that is designed to be used off-road;\n- (b) a quad bike under the Queensland Road Rules , schedule 5 ;\n- (c) a motorised golf buggy under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 ;\n- (d) a ship under the Transport Operations (Marine Safety) Act 1994 , section 10 ;\n- (e) a personal watercraft under the Transport Operations (Marine Safety) Act 1994 , schedule 1 ;\n- (f) an aircraft under the Air Navigation Act 1937 , section 4 ;\n- (g) a racing vehicle under the Transport Operations (Road Use Management—Vehicle Registration) Regulation 2021 , schedule 8 .","sortOrder":52},{"sectionNumber":"sec.17A","sectionType":"section","heading":"Working out net tangible assets for group companies","content":"### sec.17A Working out net tangible assets for group companies\n\nIf a licensee is a group company, the licensee’s net tangible assets include the net tangible assets of the corporate group for the group company.\ns 17A ins 2019 SL No. 30 s 22","sortOrder":53},{"sectionNumber":"pt.4-div.4","sectionType":"division","heading":"Deeds of covenant and assurance","content":"## Deeds of covenant and assurance","sortOrder":54},{"sectionNumber":"sec.17B","sectionType":"section","heading":"Amounts under deed of covenant and assurance that may be included as assets of licensee","content":"### sec.17B Amounts under deed of covenant and assurance that may be included as assets of licensee\n\nA deed of covenant asset may be included as an asset of the licensee only if—\nthe licensee is a person other than an individual who is a sole trader; and\nthe licensee is a category 1, 2, 3, 4, 5, 6 or 7 licensee; and\nthe covenantor under the deed of covenant and assurance is eligible to enter the deed as covenantor under section 17C ; and\nsubsection (2) is complied with in relation to the deed.\nFor subsection (1) (d) , the original deed of covenant and assurance must be—\nin the approved form; and\ngiven to the commission; and\naccompanied by—\na statement of financial position, in the approved form, for the covenantor under the deed; and\na copy of each document relied on by the licensee in assessing the covenantor’s eligibility to enter the deed, including, for example, evidence of the net tangible assets of the covenantor.\nThe licensee must, if reasonably practicable, ensure the statement of financial position mentioned in subsection (2) is prepared by the accountant who prepares any MFR report for the licensee that includes the deed of covenant asset for working out the licensee’s net tangible assets.\ns 17B ins 2019 SL No. 30 s 23\n(sec.17B-ssec.1) A deed of covenant asset may be included as an asset of the licensee only if— the licensee is a person other than an individual who is a sole trader; and the licensee is a category 1, 2, 3, 4, 5, 6 or 7 licensee; and the covenantor under the deed of covenant and assurance is eligible to enter the deed as covenantor under section 17C ; and subsection (2) is complied with in relation to the deed.\n(sec.17B-ssec.2) For subsection (1) (d) , the original deed of covenant and assurance must be— in the approved form; and given to the commission; and accompanied by— a statement of financial position, in the approved form, for the covenantor under the deed; and a copy of each document relied on by the licensee in assessing the covenantor’s eligibility to enter the deed, including, for example, evidence of the net tangible assets of the covenantor.\n(sec.17B-ssec.3) The licensee must, if reasonably practicable, ensure the statement of financial position mentioned in subsection (2) is prepared by the accountant who prepares any MFR report for the licensee that includes the deed of covenant asset for working out the licensee’s net tangible assets.\n- (a) the licensee is a person other than an individual who is a sole trader; and\n- (b) the licensee is a category 1, 2, 3, 4, 5, 6 or 7 licensee; and\n- (c) the covenantor under the deed of covenant and assurance is eligible to enter the deed as covenantor under section 17C ; and\n- (d) subsection (2) is complied with in relation to the deed.\n- (a) in the approved form; and\n- (b) given to the commission; and\n- (c) accompanied by— (i) a statement of financial position, in the approved form, for the covenantor under the deed; and (ii) a copy of each document relied on by the licensee in assessing the covenantor’s eligibility to enter the deed, including, for example, evidence of the net tangible assets of the covenantor.\n- (i) a statement of financial position, in the approved form, for the covenantor under the deed; and\n- (ii) a copy of each document relied on by the licensee in assessing the covenantor’s eligibility to enter the deed, including, for example, evidence of the net tangible assets of the covenantor.\n- (i) a statement of financial position, in the approved form, for the covenantor under the deed; and\n- (ii) a copy of each document relied on by the licensee in assessing the covenantor’s eligibility to enter the deed, including, for example, evidence of the net tangible assets of the covenantor.","sortOrder":55},{"sectionNumber":"sec.17C","sectionType":"section","heading":"Who is eligible to be covenantor under deed of covenant and assurance","content":"### sec.17C Who is eligible to be covenantor under deed of covenant and assurance\n\nA person is eligible to enter a deed of covenant and assurance as a covenantor in favour of a licensee that is a corporation, if the person is—\na director of the corporation; or\na related body corporate of the corporation.\nAlso, a person is eligible to enter a deed of covenant and assurance as a covenantor in favour of a licensee if the person is—\nfor a licensee who is a trustee of a trust—a beneficiary of the trust; or\nfor a licensee who is, or is to be, an entity carrying on business in a partnership—another partner in the partnership; or\nfor a licensee that is a group company—another group company in the same corporate group.\nHowever, a person is only eligible under subsection (1) or (2) if the person holds net tangible assets, worked out under division 1 as if a reference to a licensee were a reference to the person, of an amount that is at least equal to the value of the deed of covenant asset.\nIn this section—\nrelated body corporate , of a corporation, means—\na related body corporate of the corporation under the Corporations Act , section 50 ; or\nanother corporation that has the same shareholders or directors as the corporation.\ns 17C ins 2019 SL No. 30 s 23\n(sec.17C-ssec.1) A person is eligible to enter a deed of covenant and assurance as a covenantor in favour of a licensee that is a corporation, if the person is— a director of the corporation; or a related body corporate of the corporation.\n(sec.17C-ssec.2) Also, a person is eligible to enter a deed of covenant and assurance as a covenantor in favour of a licensee if the person is— for a licensee who is a trustee of a trust—a beneficiary of the trust; or for a licensee who is, or is to be, an entity carrying on business in a partnership—another partner in the partnership; or for a licensee that is a group company—another group company in the same corporate group.\n(sec.17C-ssec.3) However, a person is only eligible under subsection (1) or (2) if the person holds net tangible assets, worked out under division 1 as if a reference to a licensee were a reference to the person, of an amount that is at least equal to the value of the deed of covenant asset.\n(sec.17C-ssec.4) In this section— related body corporate , of a corporation, means— a related body corporate of the corporation under the Corporations Act , section 50 ; or another corporation that has the same shareholders or directors as the corporation.\n- (a) a director of the corporation; or\n- (b) a related body corporate of the corporation.\n- (a) for a licensee who is a trustee of a trust—a beneficiary of the trust; or\n- (b) for a licensee who is, or is to be, an entity carrying on business in a partnership—another partner in the partnership; or\n- (c) for a licensee that is a group company—another group company in the same corporate group.\n- (a) a related body corporate of the corporation under the Corporations Act , section 50 ; or\n- (b) another corporation that has the same shareholders or directors as the corporation.","sortOrder":56},{"sectionNumber":"sec.17D","sectionType":"section","heading":"Requirement to give commission information—amount under deed of covenant and assurance no longer included as asset","content":"### sec.17D Requirement to give commission information—amount under deed of covenant and assurance no longer included as asset\n\nThis section applies if a licensee intends to stop including a deed of covenant asset for working out the licensee’s net tangible assets.\nThe licensee must give the commission—\nan MFR report demonstrating the licensee’s net tangible assets are, without the deed of covenant asset, sufficient for the licensee’s maximum revenue for the relevant reporting year; or\nan application under section 11M to reduce the licensee’s maximum revenue, accompanied by an MFR report.\ns 17D ins 2019 SL No. 30 s 23\n(sec.17D-ssec.1) This section applies if a licensee intends to stop including a deed of covenant asset for working out the licensee’s net tangible assets.\n(sec.17D-ssec.2) The licensee must give the commission— an MFR report demonstrating the licensee’s net tangible assets are, without the deed of covenant asset, sufficient for the licensee’s maximum revenue for the relevant reporting year; or an application under section 11M to reduce the licensee’s maximum revenue, accompanied by an MFR report.\n- (a) an MFR report demonstrating the licensee’s net tangible assets are, without the deed of covenant asset, sufficient for the licensee’s maximum revenue for the relevant reporting year; or\n- (b) an application under section 11M to reduce the licensee’s maximum revenue, accompanied by an MFR report.","sortOrder":57},{"sectionNumber":"sec.17E","sectionType":"section","heading":"Requirement to give commission information—revocation of deed of covenant and assurance","content":"### sec.17E Requirement to give commission information—revocation of deed of covenant and assurance\n\nThis section applies if a licensee includes a deed of covenant asset for working out the licensee’s net tangible assets, and either—\na covenantor wishes to revoke the deed; or\nthe licensee becomes aware that the covenantor is no longer eligible to be the covenantor under section 17C .\nThe licensee must, as soon as practicable, give the commission an MFR report that does not include the deed of covenant asset for working out the licensee’s net tangible assets.\nMaximum penalty—20 penalty units.\ns 17E ins 2019 SL No. 30 s 23\n(sec.17E-ssec.1) This section applies if a licensee includes a deed of covenant asset for working out the licensee’s net tangible assets, and either— a covenantor wishes to revoke the deed; or the licensee becomes aware that the covenantor is no longer eligible to be the covenantor under section 17C .\n(sec.17E-ssec.2) The licensee must, as soon as practicable, give the commission an MFR report that does not include the deed of covenant asset for working out the licensee’s net tangible assets. Maximum penalty—20 penalty units.\n- (a) a covenantor wishes to revoke the deed; or\n- (b) the licensee becomes aware that the covenantor is no longer eligible to be the covenantor under section 17C .","sortOrder":58},{"sectionNumber":"sec.17F","sectionType":"section","heading":"Requirement to give commission information—change to deed of covenant and assurance","content":"### sec.17F Requirement to give commission information—change to deed of covenant and assurance\n\nThis section applies if—\na licensee includes a deed of covenant asset for working out the licensee’s net tangible assets; and\nthe deed is amended.\nThe licensee must, as soon as practicable, give the commission an MFR report showing how the amendment affects the licensee’s net tangible assets.\nMaximum penalty—20 penalty units.\ns 17F ins 2019 SL No. 30 s 23\n(sec.17F-ssec.1) This section applies if— a licensee includes a deed of covenant asset for working out the licensee’s net tangible assets; and the deed is amended.\n(sec.17F-ssec.2) The licensee must, as soon as practicable, give the commission an MFR report showing how the amendment affects the licensee’s net tangible assets.\n- (a) a licensee includes a deed of covenant asset for working out the licensee’s net tangible assets; and\n- (b) the deed is amended.","sortOrder":59},{"sectionNumber":"pt.4A","sectionType":"part","heading":"Current ratio","content":"# Current ratio","sortOrder":60},{"sectionNumber":"pt.4A-div.1","sectionType":"division","heading":"Requirement to maintain current ratio of 1 or more","content":"## Requirement to maintain current ratio of 1 or more","sortOrder":61},{"sectionNumber":"sec.17G","sectionType":"section","heading":"Licensee must maintain current ratio of 1 or more","content":"### sec.17G Licensee must maintain current ratio of 1 or more\n\nA licensee must, at all times, have a current ratio of at least 1.\ns 17G ins 2019 SL No. 30 s 24","sortOrder":62},{"sectionNumber":"pt.4A-div.2","sectionType":"division","heading":"Working out current ratio","content":"## Working out current ratio","sortOrder":63},{"sectionNumber":"sec.17H","sectionType":"section","heading":"What is a licensee’s current ratio","content":"### sec.17H What is a licensee’s current ratio\n\nA licensee’s current ratio is worked out using the following formula—\nwhere—\nCA means the licensee’s current assets.\nCL means the licensee’s current liabilities.\nThe ratio must not be rounded up.\nFor subsection (1) , an asset is a current asset of a licensee if, when the current ratio is worked out—\nthe asset is treated as an asset of the licensee for working out the licensee’s net tangible assets under part 4 ; and\nthe asset—\nis of the type that is realised, sold or consumed in the ordinary course of carrying on the licensee’s business; or\nis to be realised within 12 months after the day the current ratio is being worked out; or\nis held for trading within the meaning of Australian Accounting Standard AASB 9; or\nis cash or a cash equivalent, other than an asset that is restricted from being exchanged or used to settle a liability under the Australian Accounting Standards; or\nis a loan given by the licensee to a related entity if, on the day the current ratio is worked out, the related entity has current assets that are sufficient to repay the loan in full.\nHowever, an asset is not a current asset if the asset—\nis real property, unless the property is—\nlisted on the market for sale when the current ratio is worked out; and\nvalued under the Australian Accounting Standards at cost, or the net realisable value of the property, whichever is lower; or\nis a deed of covenant asset.\nFor subsection (1) , a liability is a current liability of the licensee if the liability is payable by the licensee within 12 months after the day the current ratio is worked out.\nThis section applies subject to section 17I .\ns 17H ins 2019 SL No. 30 s 24\namd 2019 SL No. 100 s 6\n(sec.17H-ssec.1) A licensee’s current ratio is worked out using the following formula— where— CA means the licensee’s current assets. CL means the licensee’s current liabilities.\n(sec.17H-ssec.2) The ratio must not be rounded up.\n(sec.17H-ssec.3) For subsection (1) , an asset is a current asset of a licensee if, when the current ratio is worked out— the asset is treated as an asset of the licensee for working out the licensee’s net tangible assets under part 4 ; and the asset— is of the type that is realised, sold or consumed in the ordinary course of carrying on the licensee’s business; or is to be realised within 12 months after the day the current ratio is being worked out; or is held for trading within the meaning of Australian Accounting Standard AASB 9; or is cash or a cash equivalent, other than an asset that is restricted from being exchanged or used to settle a liability under the Australian Accounting Standards; or is a loan given by the licensee to a related entity if, on the day the current ratio is worked out, the related entity has current assets that are sufficient to repay the loan in full.\n(sec.17H-ssec.4) However, an asset is not a current asset if the asset— is real property, unless the property is— listed on the market for sale when the current ratio is worked out; and valued under the Australian Accounting Standards at cost, or the net realisable value of the property, whichever is lower; or is a deed of covenant asset.\n(sec.17H-ssec.5) For subsection (1) , a liability is a current liability of the licensee if the liability is payable by the licensee within 12 months after the day the current ratio is worked out.\n(sec.17H-ssec.6) This section applies subject to section 17I .\n- (a) the asset is treated as an asset of the licensee for working out the licensee’s net tangible assets under part 4 ; and\n- (b) the asset— (i) is of the type that is realised, sold or consumed in the ordinary course of carrying on the licensee’s business; or (ii) is to be realised within 12 months after the day the current ratio is being worked out; or (iii) is held for trading within the meaning of Australian Accounting Standard AASB 9; or (iv) is cash or a cash equivalent, other than an asset that is restricted from being exchanged or used to settle a liability under the Australian Accounting Standards; or (v) is a loan given by the licensee to a related entity if, on the day the current ratio is worked out, the related entity has current assets that are sufficient to repay the loan in full.\n- (i) is of the type that is realised, sold or consumed in the ordinary course of carrying on the licensee’s business; or\n- (ii) is to be realised within 12 months after the day the current ratio is being worked out; or\n- (iii) is held for trading within the meaning of Australian Accounting Standard AASB 9; or\n- (iv) is cash or a cash equivalent, other than an asset that is restricted from being exchanged or used to settle a liability under the Australian Accounting Standards; or\n- (v) is a loan given by the licensee to a related entity if, on the day the current ratio is worked out, the related entity has current assets that are sufficient to repay the loan in full.\n- (i) is of the type that is realised, sold or consumed in the ordinary course of carrying on the licensee’s business; or\n- (ii) is to be realised within 12 months after the day the current ratio is being worked out; or\n- (iii) is held for trading within the meaning of Australian Accounting Standard AASB 9; or\n- (iv) is cash or a cash equivalent, other than an asset that is restricted from being exchanged or used to settle a liability under the Australian Accounting Standards; or\n- (v) is a loan given by the licensee to a related entity if, on the day the current ratio is worked out, the related entity has current assets that are sufficient to repay the loan in full.\n- (a) is real property, unless the property is— (i) listed on the market for sale when the current ratio is worked out; and (ii) valued under the Australian Accounting Standards at cost, or the net realisable value of the property, whichever is lower; or\n- (i) listed on the market for sale when the current ratio is worked out; and\n- (ii) valued under the Australian Accounting Standards at cost, or the net realisable value of the property, whichever is lower; or\n- (b) is a deed of covenant asset.\n- (i) listed on the market for sale when the current ratio is worked out; and\n- (ii) valued under the Australian Accounting Standards at cost, or the net realisable value of the property, whichever is lower; or","sortOrder":64},{"sectionNumber":"sec.17I","sectionType":"section","heading":"Working out current ratio for trustees, partnerships or group companies","content":"### sec.17I Working out current ratio for trustees, partnerships or group companies\n\nFor working out the current ratio of a licensee, in addition to the current assets and current liabilities of the licensee, the following must be included—\nif the licensee is a trustee of a trust—the current assets and current liabilities of the trust;\nif the licensee carries on business in partnership—the current assets and current liabilities of the partnership;\nif the licensee is a group company—the current assets and current liabilities of the corporate group for the group company.\nSection 17H applies for working out the current assets and current liabilities of a trust, partnership or group company under this section, as if a reference in that section to the licensee were a reference to the trust, partnership or group company.\ns 17I ins 2019 SL No. 30 s 24\n(sec.17I-ssec.1) For working out the current ratio of a licensee, in addition to the current assets and current liabilities of the licensee, the following must be included— if the licensee is a trustee of a trust—the current assets and current liabilities of the trust; if the licensee carries on business in partnership—the current assets and current liabilities of the partnership; if the licensee is a group company—the current assets and current liabilities of the corporate group for the group company.\n(sec.17I-ssec.2) Section 17H applies for working out the current assets and current liabilities of a trust, partnership or group company under this section, as if a reference in that section to the licensee were a reference to the trust, partnership or group company.\n- (a) if the licensee is a trustee of a trust—the current assets and current liabilities of the trust;\n- (b) if the licensee carries on business in partnership—the current assets and current liabilities of the partnership;\n- (c) if the licensee is a group company—the current assets and current liabilities of the corporate group for the group company.","sortOrder":65},{"sectionNumber":"pt.4B","sectionType":"part","heading":"Professional indemnity insurance","content":"# Professional indemnity insurance","sortOrder":66},{"sectionNumber":"sec.17J","sectionType":"section","heading":"Licensee must maintain professional indemnity insurance","content":"### sec.17J Licensee must maintain professional indemnity insurance\n\nThis section applies to a licensee who holds a class of licence stated in schedule 2 , table, column 1 and mentioned in the provision of the Queensland Building and Construction Commission Regulation 2018 stated in column 2 opposite the class of licence.\nThe licensee must maintain professional indemnity insurance for at least the amount stated in schedule 2 , table, column 3 opposite the class of licence, for any 1 claim and in total during any 1 period of insurance.\nHowever, if the licensee is the holder of a fire protection—electrical stream—certify—fire alarm systems licence mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 , part 31 , section 1 (2) , the licensee may either—\nmaintain the professional indemnity insurance required under subsection (1) ; or\nmaintain public and products liability insurance for at least $5M.\nThe licensee must, before the expiry of the licensee’s professional indemnity insurance, give the commission—\nevidence that the licensee has renewed the policy, or has entered into a new policy for professional indemnity insurance; and\na statutory declaration verifying the licensee’s professional indemnity insurance complies with this part.\nA licensee who is a director or employee of a corporation, or partner in a partnership, maintains the professional indemnity insurance required under this section if the corporation or partnership maintains the professional indemnity insurance mentioned in this section.\ns 17J ins 2019 SL No. 30 s 24\namd 2020 SL No. 223 s 8\n(sec.17J-ssec.1) This section applies to a licensee who holds a class of licence stated in schedule 2 , table, column 1 and mentioned in the provision of the Queensland Building and Construction Commission Regulation 2018 stated in column 2 opposite the class of licence.\n(sec.17J-ssec.2) The licensee must maintain professional indemnity insurance for at least the amount stated in schedule 2 , table, column 3 opposite the class of licence, for any 1 claim and in total during any 1 period of insurance.\n(sec.17J-ssec.3) However, if the licensee is the holder of a fire protection—electrical stream—certify—fire alarm systems licence mentioned in the Queensland Building and Construction Commission Regulation 2018 , schedule 2 , part 31 , section 1 (2) , the licensee may either— maintain the professional indemnity insurance required under subsection (1) ; or maintain public and products liability insurance for at least $5M.\n(sec.17J-ssec.4) The licensee must, before the expiry of the licensee’s professional indemnity insurance, give the commission— evidence that the licensee has renewed the policy, or has entered into a new policy for professional indemnity insurance; and a statutory declaration verifying the licensee’s professional indemnity insurance complies with this part.\n(sec.17J-ssec.5) A licensee who is a director or employee of a corporation, or partner in a partnership, maintains the professional indemnity insurance required under this section if the corporation or partnership maintains the professional indemnity insurance mentioned in this section.\n- (a) maintain the professional indemnity insurance required under subsection (1) ; or\n- (b) maintain public and products liability insurance for at least $5M.\n- (a) evidence that the licensee has renewed the policy, or has entered into a new policy for professional indemnity insurance; and\n- (b) a statutory declaration verifying the licensee’s professional indemnity insurance complies with this part.","sortOrder":67},{"sectionNumber":"sec.17K","sectionType":"section","heading":"Minimum standard of professional indemnity insurance","content":"### sec.17K Minimum standard of professional indemnity insurance\n\nThe terms of a licensee’s professional indemnity insurance policy must—\ninsure the licensee for liability arising from an act or omission by the licensee in the course of conducting business under the licence; and\ninsure the licensee for liability arising from misleading or deceptive conduct, other than fraud or another illegal act or omission by the licensee; and\nfor a corporation—insure the licensee for liability arising from an act or omission by a current or former partner, director or employee of the licensee who holds or held a licence to carry out building work, or supervise building work carried out, under the licensee’s contractor’s licence; and\nfor a licensee mentioned in section 17J (3) who elects to maintain the public and products liability insurance mentioned in section 17J (3) (b) —insure the licensee for the certification of a system mentioned in the Building Act 1975 , schedule 2 , definition special fire service , paragraph (e) ; and\ninsure the licensee for costs and expenses incurred with the consent of the insurer for defending or settling a claim.\nAlso, the terms of the policy must not provide for an exclusion for the performance of building work performed by the licensee, other than an exclusion under the insurer’s standard terms for professional indemnity insurance for a business of the type carried on by the licensee.\nFor subsection (1) (e) , the insurance may, for any 1 claim, be limited to the following, whichever is greater—\n20% of the limit of insurance under the policy;\n$100,000.\ns 17K ins 2019 SL No. 30 s 24\n(sec.17K-ssec.1) The terms of a licensee’s professional indemnity insurance policy must— insure the licensee for liability arising from an act or omission by the licensee in the course of conducting business under the licence; and insure the licensee for liability arising from misleading or deceptive conduct, other than fraud or another illegal act or omission by the licensee; and for a corporation—insure the licensee for liability arising from an act or omission by a current or former partner, director or employee of the licensee who holds or held a licence to carry out building work, or supervise building work carried out, under the licensee’s contractor’s licence; and for a licensee mentioned in section 17J (3) who elects to maintain the public and products liability insurance mentioned in section 17J (3) (b) —insure the licensee for the certification of a system mentioned in the Building Act 1975 , schedule 2 , definition special fire service , paragraph (e) ; and insure the licensee for costs and expenses incurred with the consent of the insurer for defending or settling a claim.\n(sec.17K-ssec.2) Also, the terms of the policy must not provide for an exclusion for the performance of building work performed by the licensee, other than an exclusion under the insurer’s standard terms for professional indemnity insurance for a business of the type carried on by the licensee.\n(sec.17K-ssec.3) For subsection (1) (e) , the insurance may, for any 1 claim, be limited to the following, whichever is greater— 20% of the limit of insurance under the policy; $100,000.\n- (a) insure the licensee for liability arising from an act or omission by the licensee in the course of conducting business under the licence; and\n- (b) insure the licensee for liability arising from misleading or deceptive conduct, other than fraud or another illegal act or omission by the licensee; and\n- (c) for a corporation—insure the licensee for liability arising from an act or omission by a current or former partner, director or employee of the licensee who holds or held a licence to carry out building work, or supervise building work carried out, under the licensee’s contractor’s licence; and\n- (d) for a licensee mentioned in section 17J (3) who elects to maintain the public and products liability insurance mentioned in section 17J (3) (b) —insure the licensee for the certification of a system mentioned in the Building Act 1975 , schedule 2 , definition special fire service , paragraph (e) ; and\n- (e) insure the licensee for costs and expenses incurred with the consent of the insurer for defending or settling a claim.\n- (a) 20% of the limit of insurance under the policy;\n- (b) $100,000.","sortOrder":68},{"sectionNumber":"sec.17L","sectionType":"section","heading":"Commission may waive professional indemnity insurance requirements","content":"### sec.17L Commission may waive professional indemnity insurance requirements\n\nThis section applies if a licensee reasonably believes—\nprofessional indemnity insurance under section 17K is not available to the licensee; or\nit is not financially viable for the licensee to obtain professional indemnity insurance that meets the requirements of section 17K , having regard to the cost of the insurance and the amount of the licensee’s maximum revenue.\nThe licensee must give the commission notice, in the approved form, stating—\nthe licensee reasonably believes a matter mentioned in subsection (1) (a) or (b) applies to the licensee; and\nthe reasons for the licensee’s belief.\nIf the commission is satisfied a matter mentioned in subsection (1) (a) or (b) applies for the licensee, the commission may, by written notice given to the licensee, waive the requirements mentioned in sections 17J and 17K for the licensee.\ns 17L ins 2019 SL No. 30 s 24\n(sec.17L-ssec.1) This section applies if a licensee reasonably believes— professional indemnity insurance under section 17K is not available to the licensee; or it is not financially viable for the licensee to obtain professional indemnity insurance that meets the requirements of section 17K , having regard to the cost of the insurance and the amount of the licensee’s maximum revenue.\n(sec.17L-ssec.2) The licensee must give the commission notice, in the approved form, stating— the licensee reasonably believes a matter mentioned in subsection (1) (a) or (b) applies to the licensee; and the reasons for the licensee’s belief.\n(sec.17L-ssec.3) If the commission is satisfied a matter mentioned in subsection (1) (a) or (b) applies for the licensee, the commission may, by written notice given to the licensee, waive the requirements mentioned in sections 17J and 17K for the licensee.\n- (a) professional indemnity insurance under section 17K is not available to the licensee; or\n- (b) it is not financially viable for the licensee to obtain professional indemnity insurance that meets the requirements of section 17K , having regard to the cost of the insurance and the amount of the licensee’s maximum revenue.\n- (a) the licensee reasonably believes a matter mentioned in subsection (1) (a) or (b) applies to the licensee; and\n- (b) the reasons for the licensee’s belief.","sortOrder":69},{"sectionNumber":"sec.17M","sectionType":"section","heading":"Licensee must notify consumers of waiver","content":"### sec.17M Licensee must notify consumers of waiver\n\nThis section applies if, under section 17L , the commission waives the requirements mentioned in section 17J or 17K .\nThe licensee must, before entering a building contract with a consumer, give the consumer written notice stating—\nthe requirements have been waived for the licensee; and\na summary of the insurance, if any, the licensee holds that is relevant to the work proposed to be carried out by the licensee under the contract.\ns 17M ins 2019 SL No. 30 s 24\n(sec.17M-ssec.1) This section applies if, under section 17L , the commission waives the requirements mentioned in section 17J or 17K .\n(sec.17M-ssec.2) The licensee must, before entering a building contract with a consumer, give the consumer written notice stating— the requirements have been waived for the licensee; and a summary of the insurance, if any, the licensee holds that is relevant to the work proposed to be carried out by the licensee under the contract.\n- (a) the requirements have been waived for the licensee; and\n- (b) a summary of the insurance, if any, the licensee holds that is relevant to the work proposed to be carried out by the licensee under the contract.","sortOrder":70},{"sectionNumber":"pt.4C","sectionType":"part","heading":"Miscellaneous","content":"# Miscellaneous","sortOrder":71},{"sectionNumber":"sec.17N","sectionType":"section","heading":"Requirement to pay debts","content":"### sec.17N Requirement to pay debts\n\nIt is a minimum financial requirement that a licensee must pay a debt owing by the licensee to a contracted party, or a supplier of goods or services, on or before the day the debt becomes due and payable.\nA debt does not become due and payable under subsection (1) if—\nbefore the day the debt becomes due and payable, an adjudicator, court or tribunal decides the debt is not payable by the licensee; or\non the day the debt becomes due and payable, the amount of the debt is equal to or less than an amount owed by the creditor to the licensee.\nAlso, if the debt is the subject of a dispute when the debt becomes due and payable—\nsubsection (1) does not apply until the dispute is decided and applies only if the debt is owed by the licensee under the decision; and\nthe debt is due and payable—\nwithin the time stated by an adjudicator, court or tribunal; or\nwithin the time provided for under an Act; or\nif subparagraphs (i) and (ii) do not apply—within 28 days after the day the dispute is decided.\nFor subsection (1) , a debt becomes due and payable by a licensee—\nfor an amount payable under a subcontract mentioned in section 67U of the Act —the day provided for under the contract that is no later than 25 business days after submission of the payment claim; or\nfor another contract, including an amount payable to a supplier—\nwithin the time required under an Act; or\notherwise—on the day worked out under payment terms agreed between the parties to the contract.\nSubsection (4) applies subject to subsections (2) and (3) .\nFor subsection (3) , a debt is the subject of a dispute if the commission is satisfied that grounds may exist for the licensee to refuse to repay the debt, including, for example, because—\nit relates to—\ndefective or incomplete work; or\na claim that the contractual obligation relating to the debt has not been met; or\na proceeding, or a proceeding for an appeal, has started in a court or tribunal in relation to the debt; or\nan adjudication application has been made in relation to the debt.\nIn this section—\nadjudicator see the Building Industry Fairness (Security of Payment) Act 2017 , schedule 2 .\ncontracted party , for a building contract, means the party to the contract who is to carry out the building work or construction work the subject of the contract.\npayment claim see the Building Industry Fairness (Security of Payment) Act 2017 , section 68 .\ns 17N ins 2019 SL No. 30 s 24\n(sec.17N-ssec.1) It is a minimum financial requirement that a licensee must pay a debt owing by the licensee to a contracted party, or a supplier of goods or services, on or before the day the debt becomes due and payable.\n(sec.17N-ssec.2) A debt does not become due and payable under subsection (1) if— before the day the debt becomes due and payable, an adjudicator, court or tribunal decides the debt is not payable by the licensee; or on the day the debt becomes due and payable, the amount of the debt is equal to or less than an amount owed by the creditor to the licensee.\n(sec.17N-ssec.3) Also, if the debt is the subject of a dispute when the debt becomes due and payable— subsection (1) does not apply until the dispute is decided and applies only if the debt is owed by the licensee under the decision; and the debt is due and payable— within the time stated by an adjudicator, court or tribunal; or within the time provided for under an Act; or if subparagraphs (i) and (ii) do not apply—within 28 days after the day the dispute is decided.\n(sec.17N-ssec.4) For subsection (1) , a debt becomes due and payable by a licensee— for an amount payable under a subcontract mentioned in section 67U of the Act —the day provided for under the contract that is no later than 25 business days after submission of the payment claim; or for another contract, including an amount payable to a supplier— within the time required under an Act; or otherwise—on the day worked out under payment terms agreed between the parties to the contract.\n(sec.17N-ssec.5) Subsection (4) applies subject to subsections (2) and (3) .\n(sec.17N-ssec.6) For subsection (3) , a debt is the subject of a dispute if the commission is satisfied that grounds may exist for the licensee to refuse to repay the debt, including, for example, because— it relates to— defective or incomplete work; or a claim that the contractual obligation relating to the debt has not been met; or a proceeding, or a proceeding for an appeal, has started in a court or tribunal in relation to the debt; or an adjudication application has been made in relation to the debt.\n(sec.17N-ssec.7) In this section— adjudicator see the Building Industry Fairness (Security of Payment) Act 2017 , schedule 2 . contracted party , for a building contract, means the party to the contract who is to carry out the building work or construction work the subject of the contract. payment claim see the Building Industry Fairness (Security of Payment) Act 2017 , section 68 .\n- (a) before the day the debt becomes due and payable, an adjudicator, court or tribunal decides the debt is not payable by the licensee; or\n- (b) on the day the debt becomes due and payable, the amount of the debt is equal to or less than an amount owed by the creditor to the licensee.\n- (a) subsection (1) does not apply until the dispute is decided and applies only if the debt is owed by the licensee under the decision; and\n- (b) the debt is due and payable— (i) within the time stated by an adjudicator, court or tribunal; or (ii) within the time provided for under an Act; or (iii) if subparagraphs (i) and (ii) do not apply—within 28 days after the day the dispute is decided.\n- (i) within the time stated by an adjudicator, court or tribunal; or\n- (ii) within the time provided for under an Act; or\n- (iii) if subparagraphs (i) and (ii) do not apply—within 28 days after the day the dispute is decided.\n- (i) within the time stated by an adjudicator, court or tribunal; or\n- (ii) within the time provided for under an Act; or\n- (iii) if subparagraphs (i) and (ii) do not apply—within 28 days after the day the dispute is decided.\n- (a) for an amount payable under a subcontract mentioned in section 67U of the Act —the day provided for under the contract that is no later than 25 business days after submission of the payment claim; or\n- (b) for another contract, including an amount payable to a supplier— (i) within the time required under an Act; or (ii) otherwise—on the day worked out under payment terms agreed between the parties to the contract.\n- (i) within the time required under an Act; or\n- (ii) otherwise—on the day worked out under payment terms agreed between the parties to the contract.\n- (i) within the time required under an Act; or\n- (ii) otherwise—on the day worked out under payment terms agreed between the parties to the contract.\n- (a) it relates to— (i) defective or incomplete work; or (ii) a claim that the contractual obligation relating to the debt has not been met; or\n- (i) defective or incomplete work; or\n- (ii) a claim that the contractual obligation relating to the debt has not been met; or\n- (b) a proceeding, or a proceeding for an appeal, has started in a court or tribunal in relation to the debt; or\n- (c) an adjudication application has been made in relation to the debt.\n- (i) defective or incomplete work; or\n- (ii) a claim that the contractual obligation relating to the debt has not been met; or","sortOrder":72},{"sectionNumber":"sec.17O","sectionType":"section","heading":"Commission must give licensees notice of particular matters","content":"### sec.17O Commission must give licensees notice of particular matters\n\nThe commission must give a licensee written notice of the matters mentioned in subsection (2) , as soon as practicable after any of the following happens—\nthe grant of a licence to the licensee;\nthe renewal or restoration of the licensee’s licence;\na reduction in the licensee’s maximum revenue under section 11N ;\nthe licensee’s maximum revenue changes.\nFor subsection (1) , the matters are—\nthe licensee’s category; and\nthe maximum revenue for the licensee; and\nthe day the matters stated in paragraphs (a) and (b) take effect.\ns 17O ins 2019 SL No. 30 s 24\n(sec.17O-ssec.1) The commission must give a licensee written notice of the matters mentioned in subsection (2) , as soon as practicable after any of the following happens— the grant of a licence to the licensee; the renewal or restoration of the licensee’s licence; a reduction in the licensee’s maximum revenue under section 11N ; the licensee’s maximum revenue changes.\n(sec.17O-ssec.2) For subsection (1) , the matters are— the licensee’s category; and the maximum revenue for the licensee; and the day the matters stated in paragraphs (a) and (b) take effect.\n- (a) the grant of a licence to the licensee;\n- (b) the renewal or restoration of the licensee’s licence;\n- (c) a reduction in the licensee’s maximum revenue under section 11N ;\n- (d) the licensee’s maximum revenue changes.\n- (a) the licensee’s category; and\n- (b) the maximum revenue for the licensee; and\n- (c) the day the matters stated in paragraphs (a) and (b) take effect.","sortOrder":73},{"sectionNumber":"sec.17P","sectionType":"section","heading":"Commission may require valuation of asset","content":"### sec.17P Commission may require valuation of asset\n\nThe commission may, at any time, give a licensee a notice—\nasking the licensee to give the commission a copy of a valuation by a registered valuer of an asset mentioned in the licensee’s financial information or MFR report; and\nstating a reasonable time of at least 21 days within which the licensee must comply with the requirement under paragraph (a) .\nThe licensee must comply with the notice.\nMaximum penalty—20 penalty units.\ns 17P ins 2019 SL No. 30 s 24\n(sec.17P-ssec.1) The commission may, at any time, give a licensee a notice— asking the licensee to give the commission a copy of a valuation by a registered valuer of an asset mentioned in the licensee’s financial information or MFR report; and stating a reasonable time of at least 21 days within which the licensee must comply with the requirement under paragraph (a) .\n(sec.17P-ssec.2) The licensee must comply with the notice. Maximum penalty—20 penalty units.\n- (a) asking the licensee to give the commission a copy of a valuation by a registered valuer of an asset mentioned in the licensee’s financial information or MFR report; and\n- (b) stating a reasonable time of at least 21 days within which the licensee must comply with the requirement under paragraph (a) .","sortOrder":74},{"sectionNumber":"sec.17Q","sectionType":"section","heading":"Commission may audit financial information and MFR reports and recover costs","content":"### sec.17Q Commission may audit financial information and MFR reports and recover costs\n\nThis section applies if the commission reasonably believes financial information or an MFR report given to the commission contains false or misleading information.\nThe commission may ask an accountant who is a registered company auditor under the Corporations Act to audit the financial information or MFR report.\nThe commission may recover the reasonable costs of the audit from the licensee as a debt.\ns 17Q ins 2019 SL No. 30 s 24\n(sec.17Q-ssec.1) This section applies if the commission reasonably believes financial information or an MFR report given to the commission contains false or misleading information.\n(sec.17Q-ssec.2) The commission may ask an accountant who is a registered company auditor under the Corporations Act to audit the financial information or MFR report.\n(sec.17Q-ssec.3) The commission may recover the reasonable costs of the audit from the licensee as a debt.","sortOrder":75},{"sectionNumber":"sec.17R","sectionType":"section","heading":"Expiry of policy— Act , sch 1 , s 76","content":"### sec.17R Expiry of policy— Act , sch 1 , s 76\n\nFor schedule 1 , section 76 (2) of the Act , the policy called ‘Minimum financial requirements’ made by the board on 28 August 2015 expires on the commencement.\ns 17R ins 2019 SL No. 30 s 24","sortOrder":76},{"sectionNumber":"pt.5","sectionType":"part","heading":"Transitional provisions","content":"# Transitional provisions","sortOrder":77},{"sectionNumber":"pt.5-div.1","sectionType":"division","heading":"Transitional provisions for SL No. 218 of 2018","content":"## Transitional provisions for SL No. 218 of 2018","sortOrder":78},{"sectionNumber":"sec.18","sectionType":"section","heading":"Minimum financial requirements—continued MFR policy is prescribed","content":"### sec.18 Minimum financial requirements—continued MFR policy is prescribed\n\nThe continued MFR policy is prescribed for section 116 (2) (ab) of the Act until the day the continued MFR policy expires under schedule 1 , section 76 of the Act .","sortOrder":79},{"sectionNumber":"sec.19","sectionType":"section","heading":"Relationship of this regulation with continued MFR policy","content":"### sec.19 Relationship of this regulation with continued MFR policy\n\nSubject to section 12, if this regulation is inconsistent with the continued MFR policy, this regulation prevails to the extent of the inconsistency.","sortOrder":80},{"sectionNumber":"sec.20","sectionType":"section","heading":"Application of s 8 to existing licensees","content":"### sec.20 Application of s 8 to existing licensees\n\nThis section applies to a person who, on the commencement, is a licensee to whom this regulation applies.\nSection 8 applies to the person as if—\nthe following day were the annual reporting day for the person—\nif the person is a category 4, 5, 6 or 7 licensee under the continued MFR policy—31 March 2019;\nif the person is a category SC1, SC2, 1, 2 or 3 licensee under the continued MFR policy—31 December 2019; and\nthe year stated in the notice given to the person under subsection (4) were the most recent reporting year in relation to the day mentioned in paragraph (a).\nHowever, the person does not commit an offence against section 8 if the person can not comply with that section because—\nthe person does not have the financial information required to be given under that section in relation to a period occurring before the commencement; and\nthe financial information was not, before the commencement, required to be kept by the person under the Act or another Act or law.\nWithin 20 business days after the commencement, the commission must give the person a written notice stating details of the person’s obligation to comply with section 8 as it applies under this section, including the year for which the person must give financial information.\nThe licensee may not apply under section 10(2) to change the day mentioned in subsection (2)(a).\nThis section does not limit the application of section 8 in relation to an annual reporting day for the person that is after the day mentioned in subsection (2)(a).\n(sec.20-ssec.1) This section applies to a person who, on the commencement, is a licensee to whom this regulation applies.\n(sec.20-ssec.2) Section 8 applies to the person as if— the following day were the annual reporting day for the person— if the person is a category 4, 5, 6 or 7 licensee under the continued MFR policy—31 March 2019; if the person is a category SC1, SC2, 1, 2 or 3 licensee under the continued MFR policy—31 December 2019; and the year stated in the notice given to the person under subsection (4) were the most recent reporting year in relation to the day mentioned in paragraph (a).\n(sec.20-ssec.3) However, the person does not commit an offence against section 8 if the person can not comply with that section because— the person does not have the financial information required to be given under that section in relation to a period occurring before the commencement; and the financial information was not, before the commencement, required to be kept by the person under the Act or another Act or law.\n(sec.20-ssec.4) Within 20 business days after the commencement, the commission must give the person a written notice stating details of the person’s obligation to comply with section 8 as it applies under this section, including the year for which the person must give financial information.\n(sec.20-ssec.5) The licensee may not apply under section 10(2) to change the day mentioned in subsection (2)(a).\n(sec.20-ssec.6) This section does not limit the application of section 8 in relation to an annual reporting day for the person that is after the day mentioned in subsection (2)(a).\n- (a) the following day were the annual reporting day for the person— (i) if the person is a category 4, 5, 6 or 7 licensee under the continued MFR policy—31 March 2019; (ii) if the person is a category SC1, SC2, 1, 2 or 3 licensee under the continued MFR policy—31 December 2019; and\n- (i) if the person is a category 4, 5, 6 or 7 licensee under the continued MFR policy—31 March 2019;\n- (ii) if the person is a category SC1, SC2, 1, 2 or 3 licensee under the continued MFR policy—31 December 2019; and\n- (b) the year stated in the notice given to the person under subsection (4) were the most recent reporting year in relation to the day mentioned in paragraph (a).\n- (i) if the person is a category 4, 5, 6 or 7 licensee under the continued MFR policy—31 March 2019;\n- (ii) if the person is a category SC1, SC2, 1, 2 or 3 licensee under the continued MFR policy—31 December 2019; and\n- (a) the person does not have the financial information required to be given under that section in relation to a period occurring before the commencement; and\n- (b) the financial information was not, before the commencement, required to be kept by the person under the Act or another Act or law.","sortOrder":81},{"sectionNumber":"sec.21","sectionType":"section","heading":"Commission must notify existing licensees of annual reporting day","content":"### sec.21 Commission must notify existing licensees of annual reporting day\n\nThe commission must give each person who holds a licence on the commencement a written notice stating the annual reporting day for the licensee.\nThe notice must—\nbe given at least 40 business days before the annual reporting day stated in the notice; and\nstate that the licensee may apply, under section 10(2), to change the licensee’s annual reporting day.\n(sec.21-ssec.1) The commission must give each person who holds a licence on the commencement a written notice stating the annual reporting day for the licensee.\n(sec.21-ssec.2) The notice must— be given at least 40 business days before the annual reporting day stated in the notice; and state that the licensee may apply, under section 10(2), to change the licensee’s annual reporting day.\n- (a) be given at least 40 business days before the annual reporting day stated in the notice; and\n- (b) state that the licensee may apply, under section 10(2), to change the licensee’s annual reporting day.","sortOrder":82},{"sectionNumber":"sec.22","sectionType":"section","heading":"Application of pt 4 to existing licensees","content":"### sec.22 Application of pt 4 to existing licensees\n\nThis section applies to a person who was a licensee immediately before the commencement.\nPart 4 does not apply to the licensee until the first annual reporting day to occur after the commencement as stated in the notice given to the person under section 21.\nThe continued MFR policy, part 2 continues to apply to the person until the day mentioned in subsection (2).\n(sec.22-ssec.1) This section applies to a person who was a licensee immediately before the commencement.\n(sec.22-ssec.2) Part 4 does not apply to the licensee until the first annual reporting day to occur after the commencement as stated in the notice given to the person under section 21.\n(sec.22-ssec.3) The continued MFR policy, part 2 continues to apply to the person until the day mentioned in subsection (2).","sortOrder":83},{"sectionNumber":"pt.5-div.2","sectionType":"division","heading":"Transitional provisions for Queensland Building and Construction Commission (Minimum Financial Requirements) and Other Legislation Amendment Regulation 2019","content":"## Transitional provisions for Queensland Building and Construction Commission (Minimum Financial Requirements) and Other Legislation Amendment Regulation 2019","sortOrder":84},{"sectionNumber":"sec.23","sectionType":"section","heading":"Definition for division","content":"### sec.23 Definition for division\n\nIn this division—\nexpired MFR policy means the policy expired under section 17R, as in force immediately before the commencement.\ns 23 ins 2019 SL No. 30 s 26","sortOrder":85},{"sectionNumber":"sec.24","sectionType":"section","heading":"Continuation of expired MFR policy for particular applications","content":"### sec.24 Continuation of expired MFR policy for particular applications\n\nThis section applies if—\nbefore the commencement—\nan application for a licence, or renewal of a licence, was made under the Act ; or\na proceeding about the compliance with the expired MFR policy by a licensee was started; and\non the commencement—\nthe application has not been decided; or\nthe proceeding has not ended.\nThis regulation as in force immediately before the commencement, and the expired MFR policy, continue to apply in relation to the application or proceeding as if the Queensland Building and Construction Commission (Minimum Financial Requirements) and Other Legislation Amendment Regulation 2019 had not commenced.\nFor subsection (2), the expired MFR policy is prescribed for section 116 (2) (ab) of the Act for deciding the application or proceeding.\nIn this section—\nproceeding includes—\nthe giving of a written notice under section 50C (2) of the Act ; and\na public examination mentioned in section 92 (b) (i) of the Act .\ns 24 ins 2019 SL No. 30 s 26\n(sec.24-ssec.1) This section applies if— before the commencement— an application for a licence, or renewal of a licence, was made under the Act ; or a proceeding about the compliance with the expired MFR policy by a licensee was started; and on the commencement— the application has not been decided; or the proceeding has not ended.\n(sec.24-ssec.2) This regulation as in force immediately before the commencement, and the expired MFR policy, continue to apply in relation to the application or proceeding as if the Queensland Building and Construction Commission (Minimum Financial Requirements) and Other Legislation Amendment Regulation 2019 had not commenced.\n(sec.24-ssec.3) For subsection (2), the expired MFR policy is prescribed for section 116 (2) (ab) of the Act for deciding the application or proceeding.\n(sec.24-ssec.4) In this section— proceeding includes— the giving of a written notice under section 50C (2) of the Act ; and a public examination mentioned in section 92 (b) (i) of the Act .\n- (a) before the commencement— (i) an application for a licence, or renewal of a licence, was made under the Act ; or (ii) a proceeding about the compliance with the expired MFR policy by a licensee was started; and\n- (i) an application for a licence, or renewal of a licence, was made under the Act ; or\n- (ii) a proceeding about the compliance with the expired MFR policy by a licensee was started; and\n- (b) on the commencement— (i) the application has not been decided; or (ii) the proceeding has not ended.\n- (i) the application has not been decided; or\n- (ii) the proceeding has not ended.\n- (i) an application for a licence, or renewal of a licence, was made under the Act ; or\n- (ii) a proceeding about the compliance with the expired MFR policy by a licensee was started; and\n- (i) the application has not been decided; or\n- (ii) the proceeding has not ended.\n- (a) the giving of a written notice under section 50C (2) of the Act ; and\n- (b) a public examination mentioned in section 92 (b) (i) of the Act .","sortOrder":86},{"sectionNumber":"sec.25","sectionType":"section","heading":"Continuation of maximum revenue under expired MFR policy","content":"### sec.25 Continuation of maximum revenue under expired MFR policy\n\nThis section applies to a licensee if, immediately before the commencement, an amount of maximum revenue applied to the licensee under the expired MFR policy.\nOn the commencement, the amount mentioned in subsection (1) is taken to be the licensee’s maximum revenue under this regulation until the day the commission first gives the licensee a notice under section 17O.\ns 25 ins 2019 SL No. 30 s 26\n(sec.25-ssec.1) This section applies to a licensee if, immediately before the commencement, an amount of maximum revenue applied to the licensee under the expired MFR policy.\n(sec.25-ssec.2) On the commencement, the amount mentioned in subsection (1) is taken to be the licensee’s maximum revenue under this regulation until the day the commission first gives the licensee a notice under section 17O.","sortOrder":87},{"sectionNumber":"sec.26","sectionType":"section","heading":"Continuation of minimum net tangible asset requirement for particular licensees","content":"### sec.26 Continuation of minimum net tangible asset requirement for particular licensees\n\nThis section applies to a person if—\nany of the following apply—\nthe person was a category SC2 licensee under the expired MFR policy immediately before the commencement;\nthe person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000 immediately before the commencement;\na licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category SC2 or category 1 licensee who has a maximum revenue of between $600,000 and $800,000; and\non the commencement, the person would, but for this section, be required under section 12 to hold net tangible assets of a higher amount than the amount required immediately before the commencement under the expired MFR policy.\nIf the licensee continues to hold the net tangible assets required under the expired MFR policy immediately before the commencement, section 12 does not apply to the licensee until 31 December 2019.\ns 26 ins 2019 SL No. 30 s 26\n(sec.26-ssec.1) This section applies to a person if— any of the following apply— the person was a category SC2 licensee under the expired MFR policy immediately before the commencement; the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000 immediately before the commencement; a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category SC2 or category 1 licensee who has a maximum revenue of between $600,000 and $800,000; and on the commencement, the person would, but for this section, be required under section 12 to hold net tangible assets of a higher amount than the amount required immediately before the commencement under the expired MFR policy.\n(sec.26-ssec.2) If the licensee continues to hold the net tangible assets required under the expired MFR policy immediately before the commencement, section 12 does not apply to the licensee until 31 December 2019.\n- (a) any of the following apply— (i) the person was a category SC2 licensee under the expired MFR policy immediately before the commencement; (ii) the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000 immediately before the commencement; (iii) a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category SC2 or category 1 licensee who has a maximum revenue of between $600,000 and $800,000; and\n- (i) the person was a category SC2 licensee under the expired MFR policy immediately before the commencement;\n- (ii) the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000 immediately before the commencement;\n- (iii) a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category SC2 or category 1 licensee who has a maximum revenue of between $600,000 and $800,000; and\n- (b) on the commencement, the person would, but for this section, be required under section 12 to hold net tangible assets of a higher amount than the amount required immediately before the commencement under the expired MFR policy.\n- (i) the person was a category SC2 licensee under the expired MFR policy immediately before the commencement;\n- (ii) the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000 immediately before the commencement;\n- (iii) a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category SC2 or category 1 licensee who has a maximum revenue of between $600,000 and $800,000; and","sortOrder":88},{"sectionNumber":"sec.27","sectionType":"section","heading":"Re-categorisation of particular category 1 licensees as SC2 licensees","content":"### sec.27 Re-categorisation of particular category 1 licensees as SC2 licensees\n\nThis section applies to a person if—\nimmediately before the commencement, the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000; or\na licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category 1 licensee who has a maximum revenue of between $600,000 and $800,000.\nOn the commencement, the person is a category SC2 licensee under this regulation.\nSubsection (4) applies if the licensee included a deed of covenant asset for working out the licensee’s net tangible assets under the expired MFR policy.\nDespite section 17B(1)(b), the licensee may continue including the asset for working out the licensee’s net tangible assets until 31 December 2019.\ns 27 ins 2019 SL No. 30 s 26\n(sec.27-ssec.1) This section applies to a person if— immediately before the commencement, the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000; or a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category 1 licensee who has a maximum revenue of between $600,000 and $800,000.\n(sec.27-ssec.2) On the commencement, the person is a category SC2 licensee under this regulation.\n(sec.27-ssec.3) Subsection (4) applies if the licensee included a deed of covenant asset for working out the licensee’s net tangible assets under the expired MFR policy.\n(sec.27-ssec.4) Despite section 17B(1)(b), the licensee may continue including the asset for working out the licensee’s net tangible assets until 31 December 2019.\n- (a) immediately before the commencement, the person was a category 1 licensee who, under the expired MFR policy, had a maximum revenue of between $600,000 and $800,000; or\n- (b) a licence is granted for an application mentioned in section 24, and the licensee for the licence is, under the expired MFR policy, a category 1 licensee who has a maximum revenue of between $600,000 and $800,000.","sortOrder":89},{"sectionNumber":"sec.28","sectionType":"section","heading":"Particular accountants taken to be qualified accountants","content":"### sec.28 Particular accountants taken to be qualified accountants\n\nIf, immediately before the commencement, a licensee was entitled to engage a particular accountant for the purposes of complying with the expired MFR policy, the accountant is taken to be a qualified accountant for the licensee until the earlier of the following—\nthe day the commission gives the licensee written notice stating that the accountant is not approved for section 11D(1)(b);\nthe day the licensee first gives the commission an MFR report prepared by the accountant after the commencement.\ns 28 ins 2019 SL No. 30 s 26\n- (a) the day the commission gives the licensee written notice stating that the accountant is not approved for section 11D(1)(b);\n- (b) the day the licensee first gives the commission an MFR report prepared by the accountant after the commencement.","sortOrder":90},{"sectionNumber":"pt.5-div.3","sectionType":"division","heading":"Transitional provision for Queensland Building and Construction Commission (Minimum Financial Requirements) Amendment Regulation 2024","content":"## Transitional provision for Queensland Building and Construction Commission (Minimum Financial Requirements) Amendment Regulation 2024","sortOrder":91},{"sectionNumber":"sec.29","sectionType":"section","heading":"Particular MFR reports required to be given before commencement","content":"### sec.29 Particular MFR reports required to be given before commencement\n\nThis section applies if—\nan MFR report for a category SC1, SC2, 1, 2 or 3 licensee was required to be given to the commission after the start of the current quarter of the reporting year for the licensee; and\nimmediately before the commencement, the report had not been given.\nSection 11D applies in relation to the MFR report.\nIn this section—\ncurrent quarter , of a reporting year for a licensee, means the quarter of the reporting year for the licensee that started, but had not ended, before the commencement.\ns 29 ins 2024 SL No. 6 s 5\n(sec.29-ssec.1) This section applies if— an MFR report for a category SC1, SC2, 1, 2 or 3 licensee was required to be given to the commission after the start of the current quarter of the reporting year for the licensee; and immediately before the commencement, the report had not been given.\n(sec.29-ssec.2) Section 11D applies in relation to the MFR report.\n(sec.29-ssec.3) In this section— current quarter , of a reporting year for a licensee, means the quarter of the reporting year for the licensee that started, but had not ended, before the commencement.\n- (a) an MFR report for a category SC1, SC2, 1, 2 or 3 licensee was required to be given to the commission after the start of the current quarter of the reporting year for the licensee; and\n- (b) immediately before the commencement, the report had not been given.","sortOrder":92},{"sectionNumber":"sch.1-pt.1","sectionType":"part","heading":"Calculated maximum revenue","content":"# Calculated maximum revenue","sortOrder":93},{"sectionNumber":"sch.1-sec.1","sectionType":"section","heading":"Definitions for part","content":"### sch.1-sec.1 Definitions for part\n\nIn this schedule—\nCMR means calculated maximum revenue.\nNTA means the net tangible assets of a licensee worked out for the licensee under part 4 of this regulation.\nM means 1 million.\nsch 1 s 1 ins 2019 SL No. 30 s 28","sortOrder":94},{"sectionNumber":"sch.1-sec.2","sectionType":"section","heading":"Licensees holding NTA of at least $12,000 but not more than $45,999","content":"### sch.1-sec.2 Licensees holding NTA of at least $12,000 but not more than $45,999\n\nIf a licensee holds NTA of $12,000 or more but not more than $45,999, the licensee’s calculated maximum revenue is $200,000.\nsch 1 s 2 ins 2019 SL No. 30 s 28","sortOrder":95},{"sectionNumber":"sch.1-sec.3","sectionType":"section","heading":"Licensees holding NTA of $46,000","content":"### sch.1-sec.3 Licensees holding NTA of $46,000\n\nIf a licensee holds NTA of $46,000, the licensee’s calculated maximum revenue is $800,000.\nsch 1 s 3 ins 2019 SL No. 30 s 28","sortOrder":96},{"sectionNumber":"sch.1-sec.4","sectionType":"section","heading":"Licensees holding NTA of more than $46,000 but not more than $156,000","content":"### sch.1-sec.4 Licensees holding NTA of more than $46,000 but not more than $156,000\n\nIf a licensee holds NTA of more than $46,000 but not more than $156,000, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 4 ins 2019 SL No. 30 s 28","sortOrder":97},{"sectionNumber":"sch.1-sec.5","sectionType":"section","heading":"Licensees holding NTA of more than $156,000 but not more than $480,000","content":"### sch.1-sec.5 Licensees holding NTA of more than $156,000 but not more than $480,000\n\nIf a licensee holds NTA of more than $156,000 but not more than $480,000, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 5 ins 2019 SL No. 30 s 28","sortOrder":98},{"sectionNumber":"sch.1-sec.6","sectionType":"section","heading":"Licensees holding NTA of more than $480,000 but not more than $1.2M","content":"### sch.1-sec.6 Licensees holding NTA of more than $480,000 but not more than $1.2M\n\nIf a licensee holds NTA of more than $480,000 but not more than $1.2M, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 6 ins 2019 SL No. 30 s 28","sortOrder":99},{"sectionNumber":"sch.1-sec.7","sectionType":"section","heading":"Licensees holding NTA of more than $1.2M but not more than $2.4M","content":"### sch.1-sec.7 Licensees holding NTA of more than $1.2M but not more than $2.4M\n\nIf a licensee holds NTA of more than $1.2M but not more than $2.4M, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 7 ins 2019 SL No. 30 s 28","sortOrder":100},{"sectionNumber":"sch.1-sec.8","sectionType":"section","heading":"Licensees holding NTA of more than $2.4M but not more than $4.8M","content":"### sch.1-sec.8 Licensees holding NTA of more than $2.4M but not more than $4.8M\n\nIf a licensee holds NTA of more than $2.4M but not more than $4.8M, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 8 ins 2019 SL No. 30 s 28","sortOrder":101},{"sectionNumber":"sch.1-sec.9","sectionType":"section","heading":"Licensees holding NTA more than $4.8M but not more than $14.4M","content":"### sch.1-sec.9 Licensees holding NTA more than $4.8M but not more than $14.4M\n\nIf a licensee holds NTA of more than $4.8M but not more than $14.4M, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 9 ins 2019 SL No. 30 s 28","sortOrder":102},{"sectionNumber":"sch.1-sec.10","sectionType":"section","heading":"Licensees holding NTA of more than $14.4M","content":"### sch.1-sec.10 Licensees holding NTA of more than $14.4M\n\nIf a licensee holds NTA of more than $14.4M, the licensee’s calculated maximum revenue is the amount worked out using the formula—\nsch 1 s 10 ins 2019 SL No. 30 s 28","sortOrder":103},{"sectionNumber":"sch.1-pt.2","sectionType":"part","heading":"Minimum net tangible assets","content":"# Minimum net tangible assets","sortOrder":104},{"sectionNumber":"sch.1-sec.11","sectionType":"section","heading":"Definitions for part","content":"### sch.1-sec.11 Definitions for part\n\nIn this part—\nM means 1 million.\nMax , for a licensee, means the licensee’s maximum revenue.\nmNTA means the minimum amount of net tangible assets a licensee must hold.\nsch 1 s 11 ins 2019 SL No. 30 s 28","sortOrder":105},{"sectionNumber":"sch.1-sec.12","sectionType":"section","heading":"Category SC1 licensees","content":"### sch.1-sec.12 Category SC1 licensees\n\nA category SC1 licensee must hold minimum net tangible assets of $12,000.\nsch 1 s 12 ins 2019 SL No. 30 s 28","sortOrder":106},{"sectionNumber":"sch.1-sec.13","sectionType":"section","heading":"Category SC2 licensees","content":"### sch.1-sec.13 Category SC2 licensees\n\nA category SC2 licensee must hold minimum net tangible assets of $46,000.\nsch 1 s 13 ins 2019 SL No. 30 s 28","sortOrder":107},{"sectionNumber":"sch.1-sec.14","sectionType":"section","heading":"Category 1 licensees","content":"### sch.1-sec.14 Category 1 licensees\n\nA category 1 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 14 ins 2019 SL No. 30 s 28","sortOrder":108},{"sectionNumber":"sch.1-sec.15","sectionType":"section","heading":"Category 2 licensees","content":"### sch.1-sec.15 Category 2 licensees\n\nA category 2 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 15 ins 2019 SL No. 30 s 28","sortOrder":109},{"sectionNumber":"sch.1-sec.16","sectionType":"section","heading":"Category 3 licensees","content":"### sch.1-sec.16 Category 3 licensees\n\nA category 3 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 16 ins 2019 SL No. 30 s 28","sortOrder":110},{"sectionNumber":"sch.1-sec.17","sectionType":"section","heading":"Category 4 licensees","content":"### sch.1-sec.17 Category 4 licensees\n\nA category 4 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 17 ins 2019 SL No. 30 s 28","sortOrder":111},{"sectionNumber":"sch.1-sec.18","sectionType":"section","heading":"Category 5 licensees","content":"### sch.1-sec.18 Category 5 licensees\n\nA category 5 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 18 ins 2019 SL No. 30 s 28","sortOrder":112},{"sectionNumber":"sch.1-sec.19","sectionType":"section","heading":"Category 6 licensees","content":"### sch.1-sec.19 Category 6 licensees\n\nA category 6 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 19 ins 2019 SL No. 30 s 28","sortOrder":113},{"sectionNumber":"sch.1-sec.20","sectionType":"section","heading":"Category 7 licensees","content":"### sch.1-sec.20 Category 7 licensees\n\nA category 7 licensee must hold at least the amount of net tangible assets worked out using the following formula—\nsch 1 s 20 ins 2019 SL No. 30 s 28","sortOrder":114}],"analysis":{"summary":{"complexity_score":8,"scope_assessment":{"changed":true,"description":"The regulation began with a focused purpose of prescribing minimum financial requirements for contractor licence applicants and holders. Through multiple amendments (2019, 2020, 2021, 2024, 2025), its scope expanded significantly to include: detailed current ratio requirements (Part 4A), professional indemnity insurance obligations and waiver procedures (Part 4B), an explicit debt payment requirement as a minimum financial requirement (s.17N), a comprehensive licensee revenue categorisation system (Parts 3A and 3B), maximum revenue calculation and management rules, and obligations for group companies, trustees, and corporate groups. The regulation now functions as a broad financial oversight framework for the Queensland building industry, well beyond its original narrower financial threshold purpose."},"complexity_factors":["Nine distinct licensee revenue categories (SC1, SC2, and Categories 1–7) each with different obligations and thresholds","Complex asset calculation rules with detailed lists of what is and isn't an allowed asset, referencing multiple Australian Accounting Standards (AASB 101, 107, 108, 116, 128, 137, 138, etc.)","Different reporting obligations depending on licensee category, business structure, and circumstances","Special rules for group companies, trustees, partnerships, and corporate groups that require consolidated financial assessments","Deed of covenant and assurance provisions with eligibility rules for covenantors and multiple ongoing disclosure obligations","Current ratio requirements with nuanced definitions of current assets and liabilities, including special rules for related-entity loans and real property","Professional indemnity insurance requirements with licence-class-specific minimum amounts, waiver procedures, and consumer disclosure obligations","Multiple cross-references to other Queensland legislation (QBCC Act, QBCC Regulation 2018, Corporations Act, Building Industry Fairness Act, various transport Acts)","Numerous amendment histories (amended multiple times between 2019–2025) creating a patchwork of provisions that must be read together","Debt payment obligations with layered exceptions for disputes, adjudication, set-off, and subcontract-specific timing rules"],"plain_english_summary":"## What This Law Does\n\nThis regulation sets out the **minimum financial requirements** that building and construction contractors in Queensland must meet to get — and keep — their contractor's licence. Think of it as the financial fitness test that the Queensland Building and Construction Commission (QBCC) runs on builders, tradespeople, and other construction professionals.\n\n## Who Does It Affect?\n\n- **Anyone applying for a Queensland contractor's licence** (builders, subcontractors, designers, fire protection specialists, etc.)\n- **Anyone who already holds a contractor's licence** in Queensland\n- Some licence types (like building designers and site classifiers who only do design work) are **exempt** from most requirements, as long as they hold the right professional indemnity insurance\n\n## Key Things It Requires\n\n### 1. Financial Categories (Revenue Tiers)\nLicensees are sorted into categories based on how much money they earn (their \"maximum revenue\"):\n- **SC1**: Up to $200,000/year\n- **SC2**: $200,001–$800,000/year\n- **Categories 1–7**: $800,001 up to over $240 million/year\n\nYour category determines what financial paperwork you must provide and how much financial muscle you need to demonstrate.\n\n### 2. Net Tangible Assets (NTA)\nYou must hold a minimum level of **net tangible assets** — basically, the value of what you own minus what you owe, excluding things like goodwill or brand value (\"intangible assets\"). Builders must hold at least **$46,000** in NTA.\n\nThe law is very specific about:\n- What **counts** as an asset (cash, vehicles, real property, unpaid invoices under 1 year old, etc.)\n- What **doesn't count** (racehorses, personal furniture, superannuation you can't access, recreational vehicles, aircraft, art collections, overdue debts over 1 year old, etc.)\n\n### 3. Current Ratio\nYou must maintain a **current ratio of at least 1:1** — meaning your short-term assets (things you can convert to cash within 12 months) must be at least equal to your short-term debts. This ensures you can pay your bills.\n\n### 4. Financial Reporting\nDepending on your category, you must regularly give the QBCC:\n- A simple **declaration form** (smaller operators, SC1/SC2)\n- **Internal management accounts** (mid-tier operators)\n- **Signed financial statements** (larger operators, Categories 4–7)\n- An **MFR Report** (Minimum Financial Requirements Report) prepared by a qualified accountant in many circumstances\n\nYou must report within set timeframes if your finances drop significantly (e.g., NTA falls by more than 30% for smaller operators, or 20% for larger ones).\n\n### 5. Professional Indemnity Insurance\nCertain licence types (designers, fire protection specialists, project managers, etc.) must hold **professional indemnity insurance** (insurance that covers you if your professional advice or design causes harm to a client). Minimum amounts vary by licence type.\n\n### 6. Pay Your Debts on Time\nIt is an explicit financial requirement that licensees **pay subcontractors and suppliers on time**. Disputes can pause this obligation, but once resolved, payment must follow quickly.\n\n## Why It Matters\n\nThis regulation is designed to protect **homeowners, subcontractors, and suppliers** by ensuring that building companies have enough financial substance to complete their work and pay their bills. If you're a builder who goes broke mid-project, the consequences for clients and tradies can be devastating — this law is a safeguard against that."},"issue_detection":{"absurdities":[{"type":"other","section":"sec.12(1)","severity":"medium","reasoning":"A minimum financial requirement of 'not less than $0' provides no meaningful financial protection. It is effectively no requirement at all, since any solvent or insolvent entity could claim compliance by having zero or any positive net tangible assets. It also creates internal tension with sec.12(3) which requires builder contractors to hold at least $46,000, suggesting the drafters understood $0 was inadequate but failed to extend meaningful minimums to all licensees.","confidence":0.85,"description":"The regulation requires a licensee to hold net tangible assets of 'not less than $0', which is a legally meaningless requirement. Any entity with net tangible assets of negative value technically has assets of less than $0, but the requirement as stated permits a licensee to hold exactly $0 in net tangible assets and still comply."},{"type":"other","section":"sec.4B(2) and sec.4B(3)","severity":"low","reasoning":"While the intent is transitional relief, the practical effect is that documents prepared under old standards lose their compliance status on a fixed date regardless of whether new standards have been adopted by the industry. A licensee who prepared documents 11 months into the transition period would have compliant documents that become non-compliant one month later with no obligation to restate. This creates phantom compliance.","confidence":0.65,"description":"The regulation includes superseded or amended accounting standards as 'prescribed accounting standards' but only for 12 months after amendment or replacement. This creates a moving window of permissible standards that is difficult to track in practice and could result in a licensee unknowingly using an expired transitional standard."},{"type":"impossible_compliance","section":"sec.11B(3) and sec.11B(4)","severity":"medium","reasoning":"The obligation to give notice and the obligation to provide a replacement report are triggered by the same awareness event. The 'as soon as practicable' standard for the replacement report, combined with the 30-day freshness requirement for accountant signatures under sec.11C(2), creates a situation where the clock on both obligations runs simultaneously but the licensee has no control over accountant availability. The penalty of 20 units for each obligation compounds the risk.","confidence":0.72,"description":"A licensee who becomes aware of a materially incorrect MFR report must give notice 'as soon as the licensee becomes aware, or ought reasonably to be aware' but must give the new MFR report only 'as soon as practicable after giving notice'. Since MFR reports must be signed by a qualified accountant no more than 30 days before being given to the commission (sec.11C(2)), a licensee who gives notice immediately but cannot obtain an accountant promptly will breach sec.11B(4) even if they are acting in good faith."},{"type":"other","section":"sec.8B(2)","severity":"low","reasoning":"The term 'licensee' is used for the applicant by virtue of sec.4A, but the revenue test is forward-looking ('total actual revenue will not exceed'). It is logically impossible to know with certainty what 'actual' future revenue will be. The provision conflates projected and actual revenue concepts.","confidence":0.6,"description":"The exemption from providing financial information with an application refers to 'the licensee's total actual revenue' not exceeding the maximum revenue approved for the existing licence. An applicant for a new licence is, by definition under the Act, not yet a licensee under that new licence. Using 'the licensee' to refer to the applicant in a forward-looking revenue test creates ambiguity about whether historical or projected revenue is being assessed."},{"type":"other","section":"sec.15(1)(c) and sec.15(1)(d)","severity":"low","reasoning":"Section 15(1)(d) covers 'more than 180 days, but less than 1 year'. Section 17(n) disallows debts where 'an invoice for the amount has been given to the debtor more than 1 year'. A debt at exactly 365 days (1 year) falls into neither category as written: it is not 'less than 1 year' under sec.15(1)(d) and not 'more than 1 year' under sec.17(n). It may fall into no category at all or arguable be included at half value under general asset principles.","confidence":0.75,"description":"Debts invoiced more than 180 days but less than 1 year are counted at half value as an asset, while debts invoiced more than 1 year ago are a disallowed asset under sec.17(n). However, there is no provision for debts invoiced at exactly 1 year, creating a potential gap or ambiguity at the boundary between the two categories."},{"type":"impossible_compliance","section":"sec.17G","severity":"high","reasoning":"Construction businesses routinely experience fluctuations in current ratios due to the timing of progress claims, retention releases, and seasonal cash flow. The 'at all times' standard with no reasonable excuse defence, as contrasted with sec.12(2) which expressly includes 'unless the licensee has a reasonable excuse', creates a structural impossibility for any active business. This is not a theoretical concern but a practical certainty for most licensees across a reporting year.","confidence":0.82,"description":"A licensee is required to 'at all times' maintain a current ratio of at least 1. This is a continuous obligation that would be breached the moment current liabilities exceed current assets, even briefly and involuntarily. Combined with the absence of a 'reasonable excuse' defence (unlike comparable obligations in sec.12(2)), this creates a strict liability obligation that is practically impossible to guarantee continuously for any active construction business."},{"type":"other","section":"sec.17N(2)(b)","severity":"medium","reasoning":"This provision effectively creates a unilateral right of set-off as a defence to the minimum financial requirement to pay debts on time. However, it operates without reference to whether the cross-debt is disputed, whether set-off is permitted under the contract, or whether the amounts are of the same character. This could be used as a tool to avoid the payment obligation in sec.17N(1) in circumstances not intended by the legislature.","confidence":0.7,"description":"A debt does not become due and payable if, on the day it is due, 'the amount of the debt is equal to or less than an amount owed by the creditor to the licensee'. This creates a self-help set-off right that overrides the contractual due date, but the regulation provides no mechanism for the licensee to formally assert this set-off, no time limit within which the cross-debt must be paid, and no notification requirement to the creditor."},{"type":"other","section":"sec.5","severity":"medium","reasoning":"The conditional structure of the exemption means that a licensee who loses their professional indemnity insurance (condition (b)) is immediately subject to the full regulation including net tangible asset requirements (sec.12) and current ratio requirements (sec.17G) with no transitional period. The 'at all times' obligations would be breached from the moment the insurance lapsed, even though the licensee had no reason to maintain financial buffers while exempt.","confidence":0.78,"description":"The exemption from the regulation for holders of particular design licences is conditional on the licensee holding professional indemnity insurance under part 4B, yet part 4B is expressly excluded from the exemption. This means the licensee must comply with part 4B as a condition of being exempt from the rest of the regulation, including the financial requirements. However, if the licensee fails to maintain the part 4B insurance, they lose the exemption and become subject to the full regulation, potentially creating an instantaneous retrospective breach of the financial requirements they were previously exempt from."},{"type":"circular_definition","section":"sec.17C(3)","severity":"medium","reasoning":"The eligibility test for a covenantor requires them to hold NTA at least equal to the 'value of the deed of covenant asset'. But that value is the amount included in the licensee's NTA calculation, which depends on the deed being valid, which depends on the covenantor being eligible. If the amount is set by the parties to the deed, there is no external check on whether the covenantor actually has sufficient NTA before the deed is executed.","confidence":0.68,"description":"A covenantor under a deed of covenant and assurance must hold net tangible assets 'of an amount that is at least equal to the value of the deed of covenant asset'. The 'value of the deed of covenant asset' is not defined in the regulation, and the deed of covenant asset is itself defined as an amount included in the licensee's assets. This creates a potential circularity: the value of the deed determines the eligibility of the covenantor, but the value of the deed is not independently defined."},{"type":"impossible_compliance","section":"sec.11L","severity":"medium","reasoning":"If a licensee realises their revenue is about to exceed the cap, they must apply before the excess occurs. Commission approval under sec.11M is not automatic or immediate. In a fast-moving construction market, a licensee could be in breach of the maximum revenue cap before the commission has had time to consider the application, despite having complied with the obligation to apply in advance. There is no safe harbour for the period between application and determination.","confidence":0.75,"description":"A licensee whose actual revenue is 'likely to exceed' maximum revenue by more than 10% must apply to increase maximum revenue 'before the actual revenue exceeds the maximum revenue'. This creates a temporal impossibility: the obligation to apply is triggered by a likelihood assessment, but the deadline is set by an event that may occur before an application can be processed and approved."}],"contradictions":[{"severity":"low","section_a":"sec.12(1)","section_b":"sec.12(3)","confidence":0.65,"description":"Section 12(1) requires all licensees to hold net tangible assets of 'not less than $0', while section 12(3) requires holders of a builder contractor's licence to hold at least $46,000. Section 12(1) is expressed as a universal requirement applying to all licensees, but is so minimal as to be rendered meaningless by the existence of sec.12(3) for builder contractors and the schedule 1 requirements for other categories. The two subsections operate simultaneously but the relationship between the $0 floor and the schedule 1 calculation is not clearly reconciled."},{"severity":"medium","section_a":"sec.9(a)","section_b":"sec.11G","confidence":0.72,"description":"Section 9(a) provides that the financial information for a category SC1 or SC2 licensee (other than an individual) is a declaration in the approved form. Section 11G empowers the commission to require a category SC1 or SC2 licensee to provide an MFR report instead. This creates a tension where the prescribed financial information for these categories is a declaration, but the commission can substitute a more onerous requirement (an MFR report prepared by a qualified accountant under sec.11A). The regulation does not specify whether the commission's power under sec.11G overrides the category-based requirement in sec.9, or whether both obligations can subsist simultaneously."},{"severity":"medium","section_a":"sec.17(g)","section_b":"sec.15(1)(l)","confidence":0.78,"description":"Section 17(g) disallows as assets 'investments in, or shares of, companies other than companies listed on a stock exchange'. Section 15(1)(l) allows as an asset 'the value of shares in companies listed on a stock exchange'. Read together, these provisions are internally consistent. However, section 15(1)(g) also allows 'an investment valued using the equity method under AASB 128 for a general purpose financial report', while sec.17(h) disallows 'investments valued using the equity method under AASB 128 for a special purpose financial statement'. The distinction between general purpose and special purpose financial statements as the determinant of whether an equity-method investment is allowed or disallowed creates a classification problem: the same investment may be allowed or disallowed depending on which type of financial statement is being prepared, yet the regulation requires compliance with both sec.8(2) and (3) simultaneously."},{"severity":"medium","section_a":"sec.8(2)","section_b":"sec.11D(2)","confidence":0.7,"description":"Section 8(2) requires information and documents to comply with all prescribed accounting standards. Section 11D(2) states that despite section 8(2), MFR reports for category SC1, SC2, 1, 2 or 3 licensees need only comply with four specified accounting standards (AASB 101, 107, 108, 1048) plus any other applicable standard for financial position. The override in sec.11D applies to 'signed financial statements included in the MFR report' but the MFR report itself contains more than just signed financial statements. This creates ambiguity about whether non-signed-financial-statement components of the MFR report must comply with all prescribed accounting standards under sec.8(2) or only the reduced set under sec.11D(2)."},{"severity":"medium","section_a":"sec.17H(3)(b)(v)","section_b":"sec.15(1)(k)","confidence":0.8,"description":"Section 15(1)(k) allows a loan to a related entity as an asset if, on the day assets are worked out, the related entity holds NTA of at least $0 and has a current ratio of at least 1. Section 17H(3)(b)(v) allows a loan to a related entity to be treated as a current asset if the related entity has 'current assets that are sufficient to repay the loan in full'. These are different tests applied to the same class of asset (inter-entity loans) for two different purposes (NTA calculation vs current ratio calculation). A loan could qualify as an asset under sec.15(1)(k) but fail to qualify as a current asset under sec.17H(3)(b)(v), or vice versa, leading to inconsistent treatment of the same asset depending on which calculation is being performed."},{"severity":"low","section_a":"sec.11B(1)","section_b":"sec.11B(2)","confidence":0.62,"description":"Section 11B(1) triggers the replacement MFR report obligation when 'information is incorrect in a material particular'. Section 11B(2) states that information is not incorrect in a material particular 'only because it is a minor error or other matter that... would not be a change of substance'. The use of 'only because' in sec.11B(2) suggests the exclusion is narrow: a minor error combined with another factor could still be material. However, the definition of materiality in sec.11B(2) is circular: something is material if it would be 'a change of substance', but the regulation does not define 'change of substance', leaving both the trigger and its exclusion undefined."},{"severity":"medium","section_a":"sec.11P(3)","section_b":"sec.8A(2)","confidence":0.67,"description":"Section 8A(2) requires a group company licensee to give financial information 'for the licensee's corporate group'. Section 11P(3) states that a group company licensee's actual revenue 'is the revenue received by the corporate group'. These provisions appear consistent, but sec.8A(3) states that for the purposes of sec.8A(2), a reference to the licensee includes a reference to the licensee's corporate group. This recursive deeming provision means that all obligations imposed on 'the licensee' in the context of group companies also apply to the corporate group itself, potentially imposing obligations on entities (other group companies) that are not themselves licensees and have no direct regulatory relationship with the commission."}]},"kimi_summary":{"_metrics":{"provider":"moonshot","completionTokens":3153},"content_quality":"ok","complexity_score":8,"scope_assessment":{"changed":true,"description":"While the core purpose remains setting financial capacity requirements, the legislation has expanded significantly beyond simple asset thresholds. It now mandates specific types of commercial insurance (professional indemnity), imposes conduct requirements regarding timely payment of debts to subcontractors, and regulates liquidity through current ratio maintenance. These additions transform the regulation from a static financial capacity test into an ongoing operational conduct and risk management framework."},"complexity_factors":["Nine distinct revenue categories (SC1, SC2, Categories 1–7) with tiered compliance thresholds and reporting requirements","Mathematical formulas in Schedule 1 for calculating both maximum permitted revenue and minimum required net tangible assets","Extensive incorporation of external Australian Accounting Standards (AASB 101, 107, 108, 116, 128, 137, 1048, etc.)","Complex asset valuation rules including aging of debts (180-day and 1-year cutoffs), exclusion of recreational vehicles/racehorses, and treatment of related-party loans","Entity-specific calculations applying different rules to sole traders, partnerships, trusts, corporations, and corporate groups","Nested exemptions where certain design professionals are exempt from financial requirements but still bound by insurance requirements (Part 4B)","Multi-layered transitional provisions preserving rights and categories under previous policy versions (the 'expired MFR policy')","Cross-references to multiple external Acts including the Corporations Act, Building Act 1975, and Building Industry Fairness (Security of Payment) Act 2017"],"plain_english_summary":"This Regulation sets the **financial fitness test** for Queensland building contractors. If you want a contractor’s licence—or already have one—you must prove you have enough money and financial stability to complete jobs without going broke.\n\n**How the system works:**\n\n**Revenue Categories:** Contractors are sorted into nine tiers (SC1, SC2, and Categories 1–7) based on annual turnover. Small operators (under $800,000) file simple declarations; large operators (over $240 million) must submit audited financial reports prepared by qualified accountants.\n\n**Net Tangible Assets (NTA):** You must own more than you owe. The Regulation uses mathematical formulas to dictate exactly how much \"real\" wealth (cash, property, equipment minus debts) you need for your revenue bracket. You cannot count assets like racehorses, recreational vehicles, collectibles, or invoices unpaid for over a year.\n\n**Current Ratio:** You must maintain a current ratio of at least 1:1—meaning your cash or assets convertible within 12 months must cover your short-term debts.\n\n**Professional Indemnity Insurance:** Design professionals (architects, engineers, fire protection designers) must carry specific levels of professional indemnity insurance, with minimum coverage amounts set by licence class.\n\n**Reporting Obligations:** Licensees must file annual financial information by a set \"annual reporting day.\" Small operators submit declarations; larger ones submit MFR Reports complying with Australian Accounting Standards.\n\n**Paying Debts:** A condition of holding a licence is that you pay subcontractors and suppliers on time. Late payment is a breach unless a court or adjudicator has decided the debt is not owed.\n\n**Deeds of Covenant:** Directors or related companies can legally guarantee to support your finances, allowing you to count their assets toward your requirements for a limited time.\n\n**Why it matters:** These rules prevent insolvent operators from entering the market, protect consumers from losing deposits when builders collapse, and ensure subcontractors get paid."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018","history":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018/history","analysis":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018/analysis","conflicts":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018/conflicts","importantCases":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018/important-cases","documents":"/api/acts/queensland-building-and-construction-commission-minimum-financial-requirements-regulation-2018/documents"}}