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  • #978476
    duds
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    Hi,

    Currently a small business ( sole Trader ) who has public liablity insurance running a food / veg market . I am concerned being a sole trader if anything happens ( ie : customer slips up etc ) that my insurance may not cover it. The policy seems air tight but I’m sure they could find some way out. I am looking at making our business a company for the sole purpose of trying to get potential issues pushed to the company rather than me. Having a company will make things a lot more complex but if it is going to save my house etc then it would be worthwhile. Just wanting to know if I was the director of this company and someone tries to sue for negligence does this ( generally ) put me in a better place.
    Regards Sam

    #1107485
    JacquiPryor
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    Hi Sam,

    I would suggest a chat with an accountant or solicitor who can help determine the best structure for your circumstances, as everyone is a bit different.. there may be alternate business structures to consider (such as trust arrangements) to even further remove your personal liability.

    Having said that, and note this is not advice, by setting up a company versus continuing as a sole trader then generally yes, this would put you in a better place. As a sole trader you personally are the legal entity for the business – by registering a company it becomes the entity – so, a company could be sued where as a ‘business name’ can’t be, it would be you personally in that situation. But as the director there may still be certain things that you could become liable for, or certain things you ‘guarantee’ on behalf of your company – so, a chat with an expert will help you determine what’s best for you.. whilst the company may generally be better than acting as a sole trader there may still be something even better.

    Hope that helps :)

    #1107486
    duds
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    Hi Jacqui,

    Thanks for your time and advice.

    Sam.

    #1107487
    BrightSpark
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    I would look at the company as trustee for a trust setup. You lawyer can set it all up very easily and they have become very affordable. Then just remember as a director you have responsibilities to the company.

    #1107488
    Avatar Consulting
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    Slips & trips in food stores

    Hi

    Having managed dozens of accidents involving customers slipping on loose food or equipment in your types of business I can tell you that the type of business structure you are is not as important as the safety systems you have established.

    Insurance companies will immediately ask to see what your accident/OHS system is and what you did as soon as you become aware of the accident. Whether you are a sole trader or a company director, you will be 100% responsible to manage & control safety in your workplace.

    Even a small slip will average $18,000 payout and most average $40-85,000 plus the OHS fines that come with it. As a company your fines are much bigger than a sole trader: something to keep in mind.

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