ESO’s new online licensing platform: Trust details no longer supported on electrical contractor licences
The Electrical Safety Office (‘ESO’) has announced a new online licencing platform that does away with details of trusts associated with electrical contractor licences from June 1 2023. So, what does this mean for electrical businesses that use a structure involving a trust? The short answer… nothing of any consequence.
The Electrical licensing eligibility guide issued in February 2023 states:
Electrical contractor licences are only issued to individuals, partnerships or corporations. An electrical contractor licence cannot be issued to a trust. It can be issued to the trustee of a trust, but the trustee must be an individual, a partnership or a corporation. Only the trustee’s name will be listed on the licence.[1]
What defines a trust?
A common misconception is that a trust is a separate legal entity. This is in part due to the fact that for taxation purposes, a trust is considered a taxpayer entity.
However, for all other purposes, a trust is not a legal entity but a legal relationship between the trustee, the beneficiaries, and the trust property.
So far as the law is concerned for most purposes, it imposes legal obligations on the trustee. So that for example, the trustee enters into any contract personally but has a right of indemnity against the trust assets in relation to any liabilities the trustee incurs under the contract.
Why then can a trust name not be associated with an electrical licence?
The Electrical Safety Act 2002 (Qld) (‘ESA’) s 4 states its purpose as:
eliminating the human cost to individuals, families and the community of death, injury and destruction that can be caused by electricity.
Section 5 of the ESA contains provisions on how the purpose is to be achieved. The most relevant for the purposes of this article is s 5(d):
Providing for protection for consumers against failures of persons who perform electrical work to properly perform and complete the work.
The Electrical Safety Regulation 2013 rule 47 provides an electrical contractor licence can only be issued to an individual, a partnership or a corporation. As discussed earlier, these are legal entities capable of suing and being sued. A trust is not capable of being sued.
So, it is in fact entirely appropriate that the existence of the trust is not noted by the Electrical Safety Office. The trustee, be it an individual, company or partnership, is noted as holding the licence and is therefore responsible for the obligations of that licence, with a right to be reimbursed for the costs of carrying out those obligations from the assets of the trust, which is in this case, of course, the business.
Conclusion
It would appear the removal of trust names from licences removes any confusion that consumers might have when faced with the question of who actually has the licence. As we have discovered, trusts are surrounded in mystery and can be complicated with numerous trustees both individual and corporate.
The changes made to licencing do not in any way affect your licence. Also, they make no difference to any business structuring or asset structuring purposes that the trust may have been created to achieve. Rather, they provide clarity as to who is the actual licence holder.
Resources
If you would like to find out a more information specific to trust, please check out the following links:
• Business Start-Up – Guide for Electricians https://www.sbgaccountants.com.au/our-resources/business-start-up-guides-by-industry/Business-Start-Up-Guide-Electrician-SBG-Accountants.pdf
• Business.gov.au – Trust https://business.gov.au/planning/business-structures-and-types/business-structures/trust
• ATO – Trusts https://www.ato.gov.au/General/Trusts/
[1] Queensland Government, Electrical Safety Office, Electrical licensing eligibility guide (February 2023, PN 12375) 15 < https://www.worksafe.qld.gov.au/__data/assets/pdf_file/0008/20042/es-licensing-eligibility-policy.pdf>.
Queries
For further information regarding this article, please contact the author or any member of our Building & Construction team.
Disclaimer
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.