Knowing where you stand legally is incredibly important for businesses – so we’ve put your legal questions to our experts!

I often use subbies, but don’t have anything formal in place. What do I need? 

Oliver Morrisey, lawyer, says:

Using subcontractors without formal agreements might seem like it saves time, but it leaves your business open to disputes, liability issues, and financial risks. A subcontractor agreement can simplify your work relationships and shield you from unnecessary trouble.

The most important reason to have a subcontractor agreement is to clearly define responsibilities. Without this, misunderstandings can arise about who is responsible for certain tasks, delays, or even costly mistakes. I worked with a contractor who ran into trouble when a subcontractor they hired improperly installed wiring, causing delays and extra costs. Since there was no formal agreement, the contractor ended up covering the costs to maintain the client relationship. That was an expensive lesson for them.

A subcontractor agreement helps you avoid this by explicitly stating the scope of work, deadlines, and who is liable for issues. For example, it should include a clause requiring subcontractors to follow safety and industry standards and carry their own insurance. This protects you from claims and ensures they are responsible for correcting any mistakes.

You should also include terms for payment, timelines, and what happens if the subcontractor fails to meet expectations. By setting everything out in writing, you protect your business and create a professional relationship built on clarity.

* Please remember, this advice does not take into account your personal or business circumstances, is general in nature, and is provided for information purposes only. Please seek professional legal advice that’s tailored to your circumstances if you need it.

I’ve got the opportunity to buy another contractor’s business. What are the considerations?

James Ballantyne, Managing Director, Ballantyne Law, says:

What are you buying?

It is critical that you identify what it actually is you are buying. Is it shares in the company that owns the business, or are you buying the business itself? For most contractors, purchasing the business assets (such as the tools, goodwill, intellectual property and other tangible and intangible assets) directly is the better, and much lower-risk option. Buying the business assets gives you much greater control over what you are taking on and limits any exposure to historic (and sometimes hard to identify) liabilities that may be associated with the company. Proper due diligence should be undertaken to ensure that there are no unwelcome surprises.

How are you buying it?

You should ensure that the purchase is properly structured. We don’t recommend tradies own and operate their business in their own name, as doing so puts their personal assets at risk, and provides little taxation flexibility. It is important to ensure that whatever structure you consider (such as a company or a trust or a combination) complies with relevant licensing obligations.

What are the revenue implications?

Depending on which state you are in, there may be duty payable on the purchase of business assets, and while most business purchases are a ‘going concern’ and GST-free, it is critical that the contract is properly drafted to ensure this.

When should you buy?

You should ensure that any contracts of sale are properly reviewed by your lawyer, and that you obtain proper taxation advice from your accountant before committing to buying a business.

What is your exit strategy?

The best time to think about what will happen when you leave your business is when you start your business. Ensuring you have properly planned for a departure (whether it is through retirement, a sale or an involuntary event like death or illness) will help maximise value and minimise risk and unpleasant tax surprises.

* Please remember, this advice does not take into account your personal or business circumstances, is general in nature, and is provided for information purposes only. Please seek professional legal advice that’s tailored to your circumstances if you need it.