Failing minimum financial requirements
Licensees who do not meet MFR are at greater risk of becoming insolvent and causing financial loss to creditors and consumers.
For this reason, the QBCC will take appropriate enforcement action against licensees who fail MFR when there is demonstrated risk associated with that licensee continuing to trade.
As a risk-based regulator, we evaluate various factors before acting on a contractor’s inability to meet MFR. Our Regulatory guide for MFR and annual reporting details these factors, and actions we may take.
Failing to be solvent
Our awareness of financial distress indicators in time for regulatory action to take effect, can minimise the damage of an insolvency event, but regulation alone cannot prevent them.
If a company becomes insolvent and is unable to pay their debts when due, by law the director must appoint an administrator. Sole traders in this position must enter bankruptcy or an insolvency agreement.
The QBCC cannot stop or influence insolvency processes but we do apply exclusions to licensees, applicants and others who have been a party to an insolvency event.
If you, or an entity you trade through, is at risk of insolvency, you should immediately seek professional, financial, legal, and/or insolvency advice.
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