Decades of consistent lobbying by enthusiastic motor vehicle institutions has led the government to impose licensing laws for motor-vehicle-repair businesses. The Australian Consumer Law (ACL) is Australia’s national consumer law, replacing previous consumer protection laws in the Commonwealth, states and territories. Licensing puts a stop to unqualified vehicle repairs, improves workshop conditions and introduces service standards. The primary focus of this guide is to educate mechanics on the legal documents they need to set up shop, as well as their rights and obligations to the consumers.
What legal documents are required for a mechanic to operate a business?
A motor-vehicle-repair business license is required to operate your own vehicle repair business. A sole trader, a partnership or a body corporate (Proprietary Limited Company) can make an application for this license. Licenses are issued for a variety of classes of repairs (for e.g. heavy vehicles, cars and motorbikes) and for auxiliary repairs such as auto-electric/AC, tire fitting etc. Individuals working without supervision in such businesses need to be certified. Further licenses and certification are required for certain classes of work, such as approved examiners of secondhand vehicles, safety certification examiners, modifying or altering vehicles, operating a crane, and gas installation. Businesses offering courtesy transportation should have certification to operate public passenger service in the state.
It is also important to ensure that you enter into a client agreement with every customer. This is a binding contract which protects both your business, and your customers.
Term and expiry
Business licenses are issued for 3 years and applications for renewal must be submitted 28 days before expiry. As a mechanic you should always be sure you’re applying for the relevant legal documents at the appropriate office (noting that mechanics in Victoria do not require a licence):
Australia Capital Territory: Office of Regulatory Services
Western Australia: Consumer Protection Licensing Branch, Department of Commerce
New South Wales: Office of Fair Trading
Tasmania: Consumer Affairs and Fair Trading
Queensland: Office of Fair Trading
South Australia: Consumer and Business Services
Northern Territory: Consumer Affairs
As an applicant, you must have suitable premises, along with the required tools and equipment. You also must employ sufficiently trained and certified staff for each class of work the business undertakes.
Having a registered license will instill confidence in your customers and make your business as legitimate and professional as possible. Licensing fees are not a form of tax imposed on the motor repair industry. Rather, licensing fees simply cover the cost of processing the application. The licensing fee is reasonable for both small and large businesses, as the cost of licensing a business is directly proportional to the number of mechanics employed by the business.
Licensing of repair businesses provides protection from unlicensed mechanics that compete for your customers. In addition, penalties for unlicensed repair work can reach $50,000. Further, licensing allows access to general legal advice services regarding technical matters, such as consumer disputes – a handy tool if you’re met with an unhappy customer or employee.
Don’t forget that the Integrated Development Assessment System (IDAS) application has to be filed for new and existing premises. Also, playing videos or music in the premises requires a Music License and auto-body repair businesses must also comply with the State’s Tobacco laws.
There’s no doubt that starting a motor vehicle repair business can become a profitable venture, but there are important legal considerations that you should understand before starting your business. Get in touch with LegalVision on 1300 544 755, and speak with one of our experienced business lawyers to get all the legal certificates and other required legal documents before starting your business.