More questions Queensland builders ask

Yes. A QBCC licensee must meet net tangible assets, current ratio and maximum revenue at all times, not only at the annual reporting date. Section 17G of the Minimum Financial Requirements Regulation 2018 requires a current ratio of at least 1, being $1 in current assets for every $1 in current liabilities.

In a share sale the licensed company keeps its licence and every obligation attached to it. If cash is stripped, a dividend is paid to the vendor before completion, or a shareholder loan is left in place, net tangible assets fall on the day of settlement. Related entity loans owed by the licensee cannot be deducted from liabilities.

In an asset sale the buyer’s own entity must satisfy the same tests before it contracts for building work. An asset sale to a buyer with no licence of the right class is not a sale, it is a wait.

The nominee must hold a contractor or nominee supervisor licence in the same class as the company licence, and must be a director, secretary or employee of the company. QBCC requires a company licence to have a nominated technical person at all times.

If you are the nominee and you are leaving, the buyer needs a replacement identified, licensed and appointed at completion rather than after it. Recruiting a licensed nominee in the current Queensland labour market is not a two week job, so it belongs in the heads of agreement.

QBCC treats a nominee who is already nominee supervisor for two or more other construction related legal entities as a risk indicator. QBCC does not publish a numeric cap, so confirm the position directly before relying on a shared nominee.

A company must notify QBCC within 14 days of a nominee ceasing to act, and must replace the nominee within 28 days. A company licence may be suspended or cancelled if it has no licensed nominee for more than 28 days.

This is the sharpest single risk in a Queensland construction sale. A buyer can pay for a licensed company on Friday and hold an unlicensed one 28 days later, having paid for the licence.

The company lodges the outgoing nominee notification itself, even where the outgoing nominee has already told QBCC. Use the QBCC company notification of outgoing nominee form and diarise both the 14 day and 28 day dates at completion.

A share sale keeps the QBCC licence, the trading history, the maximum revenue category and any prequalification with the entity, because the legal entity does not change. An asset sale moves plant, contracts and staff, and leaves the licence behind.

The trade off is the tail. In a share sale the buyer inherits the 6 year 6 month statutory warranty exposure, open retention trusts, defect liability and direction to rectify risk on completed work. That is why vendors of residential builders often prefer a share sale and why buyers push back on it.

A share sale also triggers a significant change to business under section 11F of the Minimum Financial Requirements Regulation 2018, because director and shareholder changes are express triggers. An MFR report or declaration is required as soon as practicable, and QBCC must be notified of director and nominee changes within 14 days.

QBCC calculates net tangible assets as total assets less liabilities less intangible assets less disallowed assets. Goodwill, intellectual property, patents, trademarks and formation expenses are excluded, so the thing you are actually selling earns no NTA credit.

Disallowed assets also include unregistered vehicles, cryptocurrency, unlisted investments and assets held on trust for others. No liabilities can be removed or deducted, including related entity liability loans.

The consequence is direct. If a buyer pushes acquisition goodwill into the licensed entity, NTA falls while the required floor stays where it is. A builder contractor must hold net tangible assets of at least $46,000 under section 12(3), whatever the category.

It can be done, but new current liabilities inside the licensed entity can push the current ratio below 1. That is an at all times breach of section 17G of the Minimum Financial Requirements Regulation 2018, independent of any reporting date.

A decrease in net tangible assets of more than 30% below the last accepted figure must be notified for SC1, SC2 and Categories 1 to 3. For Categories 4 to 7 the trigger is more than 20%. Notification is due within 30 days after the licensee becomes aware, under section 13.

The workable answer is to hold the funding outside the licensed entity, or to fund enough equity that the completion balance sheet still clears NTA and current ratio. Have the accountant model the completion balance sheet, not the one you lodged last December.

A share sale triggers it. Section 11F of the Minimum Financial Requirements Regulation 2018 lists trustee changes, director and shareholder changes and partnership restructures as significant changes to business.

SC1 and SC2 licensees give a declaration. Categories 1 to 7 give an MFR report, as soon as practicable after the change.

An MFR report has a short shelf life, which catches deals that drift. The financial information must be no more than 4 months old when the accountant signs, and the accountant must sign no more than 30 days before submission to QBCC. The accountant must be independent of the licensee and cannot be an employee, executive, investor, shareholder or partner.

Maximum revenue is the revenue ceiling attached to your licence category, from SC1 at not more than $200,000 through to Category 7 above $240,000,000. If actual revenue is likely to exceed the ceiling by more than 10%, the licensee must apply to increase it before actual revenue passes the cap, under section 11L.

This cuts both ways in a sale. A buyer planning to grow the acquired entity has to apply before the growth arrives. A buyer inheriting a category with headroom is buying capacity that a lower category buyer cannot use on day one.

Annual reporting for Categories 1 to 7 is due 31 December each year, with lodgement opening 1 August. SC1 and SC2 companies report by 31 March. The reporting requirement for SC1 and SC2 individuals was removed in March 2025, though those licensees must still meet NTA, current ratio and maximum revenue at all times.

As at August 2026 a project trust is required for eligible Queensland Government contracts of $1 million or more. For private sector, local government, statutory authority and government owned corporation contracts the threshold is $10 million. Phases that would have lowered the private threshold below $10 million were paused on 10 February 2025 and have not commenced.

Four conditions must all be met. The contracting party is of a caught type and the contract price meets the threshold. More than 50% of the contract price is for project trust work, and at least one subcontractor is engaged.

Exclusions apply even where the criteria are met. They include small scale residential construction, maintenance only contracts, and contracts solely for design, advisory or contract administration. Short term contracts for work to be completed in less than 90 days are also excluded. Search the QBCC Trust Account Register to see what a target has open.

No. Project trust and retention trust balances sit in the company’s bank accounts, but they are not the company’s money and cannot be valued as though they were. A trustee must cover any shortfall from its own funds.

In a share sale the buyer inherits every open retention trust, the ledger for each beneficiary, the 7 year record retention obligation and any shortfall. The trustee must reconcile monthly within 5 business days of month end and must notify beneficiaries of deposits and of withdrawals within 5 business days of each.

In an asset sale the trustee obligations do not travel with the assets. They stay with the entity that withheld the money, which is your entity, and that is one reason subcontractor relationships do not always novate cleanly in an asset deal.

The scheme covers residential construction work in Queensland valued at more than $3,300 including labour, materials and GST. Cover runs 6 years 6 months from the earliest of premium payment, contract agreement or work starting, so the exposure outlives the trading.

The licensed contractor collects the premium from the owner, includes it in the contract price, and must pay QBCC within 10 business days of entering into the contract. An unpaid premium on a job signed before completion is both an inherited offence and a cover gap for the home owner.

The scale is not theoretical. QBCC received 1,964 scheme claims in 2024-25 and approved $60.7 million in payouts, being $23.5 million defective work, $31.4 million non completion and $5.8 million subsidence. QBCC can pursue recovery against the licensee after paying a claim.

Section 72A(4) of the Queensland Building and Construction Commission Act 1991 sets an outer limit of 6 years and 6 months after the building work was completed or left incomplete. For non-structural work, QBCC’s Rectification of Building Work Policy is to consider issuing a direction within 12 months of completion.

The rectification period on a direction is usually 35 days. QBCC issued 1,223 directions to rectify in 2024-25.

Obstructing or delaying compliance carries up to 10 demerit points, penalties up to $34,462 and fines up to $2,757, and can lead to licence suspension or cancellation. A direction is given to the contractor that carried out the work, which is the licensed entity, so in a share sale it lands on the buyer.

Yes, and the rule reaches back two years. A person becomes an excluded individual through involvement with a construction company that fails. The trigger is being a director, secretary or influential person within two years before a liquidator, administrator or controller was appointed, or before the company was wound up.

Personal bankruptcy or a Part IX or Part X agreement has the same effect. The exclusion period is three years from the date of the insolvency event for a first event, and two separate relevant events can mean life exclusion. A second event arising from the same circumstances, such as personal bankruptcy on a guarantee of the company’s loan, does not count as a separate event.

A company becomes an excluded company if an excluded individual is a director, secretary or influential person of it. Its licence is cancelled unless that person steps down from the role. An influential person is someone other than a director or secretary who can control or substantially influence the company’s conduct. That definition can catch a vendor who stays on in a consulting role.

Diligence this on the buyer side, not only the vendor side, and search the Excluded Individuals Register before contracts are exchanged.

A great deal. The QBCC Licensee Register carries a complete licence history and is more detailed than the public find a contractor search. Separate QBCC registers publish suspensions, cancellations, excluded individuals, excluded accountants, adjudication decisions and trust accounts.

The Adjudication Decision Register exposes payment dispute outcomes involving your entity. The Trust Account Register exposes project and retention trust accounts. The Excluded Individuals Register exposes insolvency history attached to the people involved.

Assume a serious buyer runs all of them before making an offer. Raising an old adjudication yourself, with the context and the outcome, costs far less than having it surface in week three of due diligence.

PQC prequalification is granted to a specific supplier and is not transferable. The Queensland Government Prequalification (PQC) Conditions dated November 2025 require a prequalified supplier to notify the State without delay. Notifiable changes include material changes to business attributes, to operational or management practices, and to financial or technical capacity.

PQC applies to contractors tendering for Queensland Government building projects above $1 million, and to consultants where fees exceed $60,000. Financial capacity runs across seven categories keyed to net tangible assets recognised by Government, mirroring the QBCC bands. The One-Third Rule limits the maximum annualised contract value to one third of Maximum Revenue-Govt or licensed maximum revenue, whichever is the lesser.

The published conditions do not expressly define change of control, and they do not set out a re-application process after a sale. If government work is a material part of your revenue, confirm the position with the PQC Registrar before that pipeline is priced into goodwill.

Sections 311 to 316 of the Fair Work Act 2009 govern a transfer of business. A new employer taking transferring employees must recognise prior service for personal and carer’s leave, flexible working requests and parental leave.

For non-associated entities the new employer may elect not to recognise prior service for annual leave, redundancy and unfair dismissal. For unfair dismissal the election must be notified in writing before the employment starts, and the old employer then pays out untaken annual leave and any redundancy entitlement.

The Building and Construction General On-site Award 2020 [MA000020] is the modern award covering much on site work. Get award classifications, allowances and any enterprise agreement in order before due diligence starts. A payroll shortfall is a discount a buyer takes twice, once on the liability and once on the multiple.

Check the QLeave position at the same time. Building and construction work of $150,000 or more excluding GST attracts levies totalling 0.575% of the total cost of work. That is 0.35% portable long service leave, 0.125% Work Health and Safety and 0.1% Construction Skills Queensland. The levy is payable before a development permit is issued, or before work starts where there is no permit.

Yes. Chapter 4 of the Building Industry Fairness (Security of Payment) Act 2017 lets a subcontractor attach money payable up the contractual chain, through a notice of claim of charge.

Notice must be given within three months after practical completion of the work, or within three months after the defects liability period expires where retention money is claimed. The party higher in the chain must retain the money, and the contractor must lodge a response to the notice of claim within 10 business days.

An unpaid adjudication decision is worse again, because it is an offence not to comply within 5 business days. An open notice of claim or an unpaid adjudicated amount freezes cash the buyer expected to collect, so both belong on the completion checklist rather than in a warranty.

The demand side is strong and the risk side is visible, which is a workable combination for a well documented business. Queensland construction work done reached $16,868.4 million in the March quarter 2026, up 2.1% on the quarter and 6.0% on the year. That is ABS Construction Work Done, Preliminary, released 27 May 2026.

Queensland dwelling approvals were 4,841 in June 2026, seasonally adjusted, up 33.4% on the month. The Queensland Budget 2026-27 carries $29.616 billion of capital investment and a $119.242 billion capital program over four years, including $55.9 billion of roads, bridges and transport work.

Against that, construction was the largest sector for external administrations nationally, at 24.4% of all appointments between 1 July 2025 and 31 May 2026. That is ASIC Corporate Insolvency Update Issue 40, published 1 July 2026. Buyers price that risk, which is why a clean MFR lodgement history, a clean adjudication record and a documented forward book are worth real money.

One timing caution. The Building Reg Reno reform program is up to tranche 4, which is reviewing licensing thresholds, Queensland Home Warranty Scheme insurance parameters and trust account procedures. Test any earn-out or deferred consideration against that review before you agree to it.

It depends on the structure. Broadly, a company's licence sits with the entity but relies on an appropriately licensed nominee, so a sale commonly involves the buyer providing or arranging a new nominee, sometimes with you bridging the role through a transition. In an asset sale, the buyer generally needs their own licensing to trade. The right path depends on your licences, the buyer and the deal, so it gets mapped with your advisers at the start of the process, not discovered in the middle of it.

Often for a defined period, and it usually works in your favour. A structured transition, sometimes including nominee bridging while the buyer's licensing is finalised, protects the value you are being paid for, keeps clients and projects steady, and frequently supports a stronger price. The length and terms are negotiated as part of the deal, and they are yours to shape.

Typically as a multiple of adjusted earnings, with the multiple moving on contracted forward work, client mix, estimating and delivery capability beyond you, the licensing structure, the quality of your project accounting and the state of the defects tail. WIP, retentions and plant are handled in the structure of the deal. A confidential market appraisal establishes the likely selling price for your specific business.

Retentions owed to the business and defect obligations on completed projects are identified, quantified and allocated in the sale contract. A documented retentions ledger and a tracked, low defects history turn both from price negotiations into routine contract terms, which is exactly why they belong in your preparation work.

Not through a properly run process. The business is marketed without identification, every buyer signs a confidentiality agreement and is qualified before anything identifying is released, and sensitive detail is staged so full access comes late, with a committed buyer. In an industry this connected, confidentiality is not a courtesy, it is the process.

Now, whatever your timeline, and in this sector earlier matters more than any other, because the licensing and people moves that most lift your price take years. If your exit is closer, you may be able to fast track, and businesses with the right licences, prequalifications and contracted work are saleable to strategic buyers today. Knowing your number and your readiness costs nothing, and it turns waiting into planning.