The structure that quietly undoes your protection
A trust is a common vehicle for a small business — and a common disaster for a QBCC licence. The reason is simple: a trust has no equity of its own. When a licence sits in a trust, the QBCC cannot look to the trust for the Net Tangible Assets that support the turnover, because the trust does not own anything in its own right.
So the QBCC asks for something else: a deed of covenant and assurance. And that deed does something most builders do not realise until it is too late — it secures the licence against the personal assets of the covenantor. Usually, the family home.
The structure that was meant to protect your assets has just put them directly behind the licence.
Why a trust fails the QBCC test
The QBCC's Minimum Financial Requirements are built on the licensee holding equity — Net Tangible Assets — in the licensed entity. A company holds equity: shareholders own shares, the company owns assets, and the balance sheet stands on its own. A trust does not. The trustee holds assets on behalf of beneficiaries, but the trust itself has no equity to pledge.
When the licence sits in a trust and the NTA is short, the QBCC requires a deed of covenant and assurance. A third party — almost always the builder personally — promises their assets to support the licence. Those assets are then behind the licence. If the licence is ever at risk, those personal assets are at risk with it.
This is the exact opposite of what a trust is supposed to do.
The cost of getting it wrong
-
Personal assets behind the licence. The family home, the investment property, the personal bank account — all pledged to support a licence that was supposed to sit inside a protected structure.
-
No real asset protection. The trust structure that was meant to ring-fence wealth has been bypassed by the deed. The protection is theoretical; the exposure is real.
-
Harder category moves. Every time the licence needs to move up a category, the NTA has to be evidenced. In a trust, that means another deed, another covenantor statement, and more personal assets on the line.
-
Complexity at every reporting cycle. MFR reports, annual reporting, and category applications all carry the extra layer of the covenantor's financial position. What should be a clean licence event becomes a personal-asset event.
Why a company is the right structure for a growing licence
A company holds its own equity. The shares are owned by the shareholders, the company owns the assets, and the balance sheet supports the licence on its own. No deed of covenant. No personal assurance. No family home behind the licence.
For a growing builder, the company structure does three things a trust cannot:
-
It stands on its own. The NTA is the company's NTA. The licence is supported by the company's balance sheet, not the director's mortgage.
-
It protects the director. The licence risk stays inside the company. The director's personal assets are separate — which is the entire point of the structure.
-
It scales cleanly. Category moves, MFR reports, and maximum revenue increases are all evidenced on the company's numbers. No covenantor statements, no personal asset pledges, no extra layer at every step.
How to move from a trust to a company
Moving a licence from a trust to a company is not a rename. It is a structured transition — and it has to be done properly:
- The new company is established and capitalised with the equity it needs to support the licence category.
- The licence is transferred or a new application is made in the company's name, with the company's NTA evidenced.
- The trust's assets and contracts are dealt with so the business continues cleanly through the transition.
- The deed of covenant is released where possible, freeing the personal assets that were behind the licence.
Done right, the move puts a real wall between the business and the home — and leaves the licence stronger, not weaker.
How regular catch-ups catch the problem early
A trust structure is usually inherited, not chosen — the builder set up a trust years ago on general advice, and no one flagged the QBCC consequence. Regular catch-ups are where that gets caught:
- We review the structure at the first catch-up and flag whether the licence sits in a trust.
- We track the NTA position and identify whether a deed of covenant is in place or being relied upon.
- We plan the move to a company before the next category increase forces another personal asset pledge.
- We time the transition so the licence stays live and the business runs uninterrupted through the change.
How we help
We work with QBCC licence holders to get the structure right:
- We confirm whether your licence sits in a trust or a company, and whether personal assets are behind it.
- We plan and execute the move from trust to company, with the equity structured to support the licence category.
- We release the deed of covenant where possible, so personal assets come off the line.
- We set up regular catch-ups so the structure stays right as the business grows — not just at the moment of the move.
If your licence sits in a trust, your home may be behind it. Call the direct line — we will confirm the position and plan the move to a structure that actually protects you.
