Many types of business operations in Australia are regulated, and you will need a licence to run that business or provide certain services. If your business operates ‘commercial agent activities’ or ‘private inquiry agent activities’ in New South Wales, you will need a CAPI licence. This article will discuss the types of business activities which require a CAPI licence and provide guidance on the application process.
It is important to note that each state in Australia has different rules and regulations. If you operate in multiple states in Australia, you will need to seek advice on the type of licence you need in each state.
What is a CAPI Licence?
CAPI stands for Commercial Agents and Private Inquiry Agents. Businesses who carry out CAPI activities in New South Wales need a CAPI licence.
CAPI activities are:
- debt collection;
- process servicing;
- repossession of goods;
- investigation of persons; and
- surveillance of persons.
Types of CAPI licences
There are different types of CAPI licences that you will need depending on your business structure and whether you employ people who undertake CAPI activities. The two main categories are:
- master licences; and
- operator licences.
Master licences are needed by the business carrying out CAPI activities. Operator licences are needed for each person within the business who carries out CAPI activities. This is whether you are a:
- sole trader with no employees, or
- master licence holder and have employees.
If your business holds a master licence, your employees cannot perform CAPI activities without an operator licence.
Operator licences are probationary for the first 12 months. A master licence holder or an unrestricted operator licence holder must supervise licence holders.
Probationary operator licences are in effect for one year. Unrestricted operator licences are available for one year or five years. Master licences are available for five years. At the expiry of a licence, you will be prompted to re-apply for a licence, supplying all relevant documentation again. Licences do not automatically renew after any period of time.
Certain individuals do not need to hold a CAPI licence by virtue of their profession. This includes:
- police officers;
- members of the Australian Defence Force; and
- legal practitioners.
Operating Without a CAPI Licence
The regulator may investigate businesses undertaking CAPI activities. If you do not have the appropriate licences for you or your employees, your business could be fined.
The regulator may request a licence holder to provide information or documents relating to their activities under the licence.
Applying For a CAPI Licence
When applying for a CAPI licence, you will need to list which CAPI activities you undertake. If, after receiving a licence, you wish to add additional CAPI activities to the list, you will need to submit a ‘change of details’ form.
When applying for a CAPI licence, you may be able to rely on mutual recognition. In other words, if you have a licence in another state, territory, or in New Zealand, you can fill out a mutual recognition form to recognise that equivalent licence.
If you are an individual operating a business that performs CAPI activities, and you do not have any employees performing CAPI activities, you will need an owner or operator master licence.
To apply, you will need to:
- already hold a full unrestricted Operator licence in your CAPI activities; or
- be supervised by an unrestricted Operator licence for the first 12 months of holding the Master licence.
Other Tips
Training
Applying for a CAPI licence is not the only step you need to take to provide CAPI activities. Once you have applied, you will also need to undertake training in your CAPI activities. Such training can be provided by a Registered Training Organisation (RTO). You can undertake this training within 24 months of lodging your application.
Client Agreement
It is important to have a client agreement between your business and your client, setting out:
- the services you will be providing;
- as well as payment terms;
- limitations of liability; and
- disputes and termination clauses.
In this agreement, your client will look to see if you make the appropriate warranties that in providing your services, you comply with all applicable laws and regulations. In particular, if you carry out CAPI activities, you will usually warrant that you have the appropriate licences and documentation to provide those services.
Notifying clients or subjects of your licence
Licensees must conspicuously display their licence number in any advertisements (such as on their website) or correspondence (such as emails) relating to their services. If performing CAPI activities by telephone, you must provide your licence number if asked by the person you are speaking to.
Key Takeaways
It is important to seek guidance on what your licensing obligations are. This will depend on:
- whether you have previously held a licence;
- what types of services you offer; and
- which states you operate in.
There are also other factors which may affect your eligibility for a licence. Not complying with any licensing requirements can result in fines and being prohibited from continuing to conduct your business until you have the appropriate licence.
If you are considering operating a business that provides commercial agent activities or private inquiry agent activities, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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