The liquidator’s letter lands, the business you built is gone, and you are already thinking about starting again. Then a second letter arrives, this time from QBCC, and it says you may now be an QBCC excluded individual. If that is where you are, we get it. You have just lost a company, and now your ability to earn a living in the trade is on the line too.
This is one of the harshest parts of the licensing system, and it catches people who never did anything dishonest. Here is how it works, who it reaches, and what you can still do about it.
What counts as an insolvency event under the QBCC rules
QBCC can exclude a person when an insolvency event happens. Two kinds of event are covered:
- Personal insolvency: you become bankrupt, or you enter a Part IX or Part X arrangement under bankruptcy law.
- Company failure: a construction company has a provisional liquidator, liquidator, administrator or controller appointed for the benefit of creditors, or it is wound up or ordered to be wound up.
The rule is aimed at construction companies. QBCC defines that as a company that directly or indirectly carried out building work or building work services within two years of the insolvency event. A director whose other business failed outside the building industry is a different situation, because that company is not a construction company.
Who gets caught, and the two-year lookback that surprises people
Most contractors assume the rule only hits whoever was in charge on the day the liquidator was appointed. It reaches further. A person can be excluded if, at any time in the two years before the company failure, they were:
- a director of the construction company
- the company secretary
- an “influential person”, meaning someone who is not a director or secretary but who can control or substantially influence the company
That lookback matters. If you stepped down six months before the collapse, you are still inside the window. QBCC’s own process starts with a show cause notice about why your licence should not be cancelled and why you should not be treated as excluded. Exclusion is effectively automatic unless you can show the Commissioner that you had already ceased to be an officer or influential person before the event, and that the company was solvent when you left.
One carve-out is worth knowing. If a second insolvency event comes from the same circumstances as the first, it does not count as a separate event. QBCC’s example is a person who goes bankrupt because they guaranteed the company’s loans after the company was already wound up.
What exclusion actually costs you
The headline penalty is time. The exclusion period is three years from the date of the insolvency event. Two separate and independent relevant insolvency events can lead to a lifetime exclusion. That is the reason a first failure needs careful handling, because the second one is the one that can end a career.
During the exclusion period:
- Your own QBCC licence is cancelled and you cannot reapply until the period ends.
- You cannot be a director, secretary or influential person of a QBCC licensed company.
- You cannot be in partnership with a licensed contractor.
- You cannot act as a nominee supervisor or site supervisor for a licensed business.
The damage can also spread. A company becomes excluded if an excluded individual is its director, secretary or influential person, and its licence is cancelled unless that person stops holding the role. So the plan to “just put it in my partner’s company and stay on as a consultant” can take down a clean business as well.
Why this hits harder than the MFR problem that came before it
Most failed builders saw the warning signs. Cash flow got tight, minimum financial requirements slipped, and a report or two went late. Fixing an MFR shortfall is stressful but recoverable. Exclusion is different because it is triggered by an external appointment, not by anything you file, and the clock runs from the date of that event.
If you are exhausted by the paperwork and unsure what to say to QBCC, that is normal. Pause before you reply. The way you respond to the show cause notice, and the evidence you attach about when you left the company and how solvent it was, can decide the outcome.
Need help working out where you stand? Book a Strategy Session with QBCC Express and we will map your exposure, your timeline and your response before the deadline on the notice runs out.
Practical steps if you are in the lookback window
Whether the collapse has happened or you can see it coming, these steps protect your options:
- Pin down your dates. Write down exactly when you were appointed and when you resigned as director, secretary or anyone with real influence, and keep the ASIC records.
- Gather solvency evidence. Financial statements, bank records and accountant advice showing the company could pay its debts when you left.
- Check your influence. If you stepped back on paper but still signed off on money or work, QBCC may treat you as an influential person.
- Do not open a new company in a hurry. A fresh entity with you as a director or influential person during exclusion will lose its licence.
- Answer the show cause notice on time. Silence hands QBCC the decision.
If you hold a technical role and your career depends on being a supervisor, the knock-on effect is serious. Exclusion removes you from supervisor roles during the period, so planning your return, including how you will meet Site Supervisor Licence eligibility when the time comes, is worth doing early.
Protect the next three years, not just the next letter
A failed company does not have to be the end of your career, but a badly handled response can make it one. The difference between a three-year pause and a lifetime problem often comes down to the first reply you send. If an insolvency event is on your horizon or already behind you, get a plan in place now. Book your Strategy Session and let us help you respond with confidence.
Frequently Asked Questions
What is a QBCC excluded individual?
An excluded individual is a person who has been a director, secretary or influential person of a construction company in the two years before it failed, or who has gone bankrupt. Their licence is cancelled and they cannot reapply until the exclusion period ends.
How long does a QBCC exclusion last?
The exclusion period is three years from the date of the insolvency event. Two separate and independent relevant insolvency events can lead to a lifetime exclusion.
Can I avoid exclusion if I resigned before the company collapsed?
Possibly. Exclusion is effectively automatic unless you show the Commissioner that you ceased to be an officer or influential person before the event and that the company was solvent when you left. Good dates and financial evidence are essential.
Does the insolvency of a non-construction company count?
The rules apply to construction companies, meaning companies that directly or indirectly carried out building work or building work services within two years of the insolvency event. A company outside the building industry is not caught on that basis.
Can an excluded person run a licensed company?
No. They cannot be a director, secretary or influential person of a licensed company, and they cannot partner with a licensed contractor. A company that keeps an excluded individual in one of those roles has its licence cancelled.
