BUSINESS ARRANGEMENTS Flashcards
- What are the different ways you can set up an architectural firm as a legal entity?
Sole Practitioner, Partnership, Company, Trust structure
- Where would you find information and advice when considering the establishment of your own firm?
Former employers, colleagues, Acumen website
- What forms of insurance would you need to consider when setting up an architectural firm?
Main insurances are: Professional Indemnity Insurance, Public Liability, Workers Compensation. Others include: Travel, Building and Contents, Glass, Electronic Breakdowns, Replacing Drawings, Burglary and Theft, Motor
- What risk does each policy cover?
PII – insurance for negligence or risk associated with practicing as a professional architect.
PL – to cover any accident or loss suffered by a visitor to the workplace of the architect, or any accident or loss caused by an employee to someone on site (i.e. subbie).
WC – to cover any loss or accidents claimed by employees.
- How would you obtain finance for establishing a new firm?
Personal finances – savings, assets, bank loan etc.
- What information would be required to obtain the required finance?
Proof of insurances, ABN, Business Plan with predicted financial forecast.
- What is PI insurance and what does it cover?
Professional Indemnity Insurance is cover to indemnify professionals against claims for legal liability arising from breach of professional duty in the course of the profession covered by that policy. The Architects Professional Code of Conduct requires registered architects to have PII.
- Is PI insurance different from other insurance cover and if so, in what way?
PII is specifically for claims related to professional breach/claims as a result of professional negligence during the course of performing work related to professional services
- What are your obligations to the insurer under the terms of the PI policies?
Architects are to perform their work competently and professional – to the standard of a reasonably competent professional working in the same field.
- How much cover do you need when seeking PI insurance?
The amount of cover required depends on the type and scale of work you are performing, also the risk associated with that type of work.
- When hiring new staff, how do you establish salary levels?
Refer to Fair Work Commission for an indication of wages for particular levels, Acumen website for advice, fee scales from recruitment websites, ask colleagues and other architectural professionals.
- What is the difference between a contract of employment and working for another architect as an independent contractor?
Contract of employment – the employer will cover the employee under their insurance policies, will pay superannuation and benefits (paid leave, sick leave etc), responsible for tax, copyright remains property of business.
Independent contractor – Often responsible for own insurances (PII), sometimes own equipment (depending on agreement), can claim copyright on work (unless agreement states otherwise), responsible for own taxation, not entitled to benefits of a permanent employee.
