2 General Practice Considerations Flashcards
What are the characteristics of a Partnership?
Similar to Sole Proprietor in regards to setup & paperwork
Two or more partners - all liable for debts of the others
May carry out under business name
Greater flexibility and resources due to additional people
What are the characteristics of a Sole Proprietorship?
Inexpensive to set up
Individual fully liable for business debts
Fewer tax concessions but also less regulations and paperwork
What are the characteristics of a Company (Pty Ltd)?
More expensive to setup and more regulated - but pay less tax
Liability limited to company’s assets
Can trade anywhere in Australia
Business structure is less reliant on key people
Has to allow for superannuation to employees
What is Professional Indemnity Insurance?
“Insurance designed to protect professionals against claims for breach of contract or negligence/actionable carelessness.”
Premium based in gross turnover if practice and risk assessment
Cover should allow for cumulative effect of multiple claims in one year
What is Workers Compensation?
Required by all businesses with employees
Provides wage replacement and medical benefits to employees injured in the course of employment
What is Public Liability Insurance?
Covers property damage or personal injury to a 3rd party, either on your premises or by an employee
What Insurances Do You Need for a business?
Contents/Fire/Building Insurance
Workers Compensation
Public liability insurance
Professional Indemnity Insurance
What professionals might you need to have access to when starting your own practice?
Lawyer - legal advice, can assist with partners agreements, office and equipment leasing, employment contracts and business registration
Accountant - financial advice, can assist with regulations affecting small businesses (PAYG, GST, BAS, etc). Tracking and assessing profit/overheads.
Insurance Broker - for provision of insurance and advice
How do you manage risk?
Have QA systems in place
What is the Contractors Liability period (statute of limitations)?
After issue of FC, contractor obligated to rectify latent defects where they represent a breach of contractual obligations, up to 12 years.
Not liable for patent defects (could have been identified by a reasonable inspection)
What is the Architects Liability Period?
3-6 years from time negligent act becomes apparent (but may be years after building complete)
How long should you retain documents?
Minimum 7 years (legal requirement)
Preferably forever! (As no limitation to tort liability)
What are some ways of finding out information if you are working as a Sole Practitioner and don’t know how to solve?
Ring AIA - they will advise who to get in touch with
Ask for advice from insurer/legal professional
Ask for advice from other architects/colleagues
Look at practice notes
Re-read the contract
Research
Check the BCA
What are some considerations when taking on work as a new practice?
Ensure you have enough resources, premises, insurance and experience to take on
May need to hire additional consultants, or work in joint venture with more experienced firm (more expensive for client)
