Builder insolvency in the public record.
A current licence doesn't erase insolvency history.
A builder can hold a current, valid contractor licence while having a history of directing companies that became insolvent. The licence register checks only whether the current licence is active — it does not surface the insolvency record of the entity or the director's history across previous entities.
The Australian construction industry has historically high insolvency rates relative to other industries. When a builder becomes insolvent mid-project, homeowners typically lose their deposit and are left with a partially completed or defective build. Home warranty insurance only activates if the policy was in place and covers the trigger event.
ASIC publishes notices of external administration appointments, winding-up orders and deregistrations. These notices are public record and searchable. TrustSignal checks these records for the building entity and the directors linked to that entity.
ASIC Published Notices
Voluntary administration, liquidation, receivership and controller appointments. Published under the Corporations Act 2001.
ASIC Connect — Company Search
Company status field shows "Under External Administration" for companies in VA, liquidation or receivership.
Australian Financial Security Authority (AFSA)
Personal insolvency — bankruptcy and debt agreements — for sole traders or individuals who have personally guaranteed company debts.
Insolvency Notices (insolvencynotices.asic.gov.au)
ASIC's dedicated portal for published notices under the Corporations Act and the Bankruptcy Act.
Types of external administration.
Each type of external administration has different implications for a building contract in progress and for any future claim against the builder.
Triggered when a company is insolvent or likely to become insolvent
During administration, the administrator may disclaim contracts or continue them. Homeowners should seek independent legal advice immediately. The administrator has 5 business days to decide whether to continue or disclaim contracts.
Published on ASIC's published notices as a voluntary administration appointment
A company is wound up by its directors and creditors (CVL) or by court order on a creditor's application
On liquidation, building contracts are terminated. Home warranty insurance may be triggered if the builder is the licenced entity in the contract.
Published on ASIC's published notices. The company's status changes to "Under External Administration" on ASIC Connect.
Typically triggered by a secured creditor (usually a bank) enforcing a charge over the company's assets
The receiver may or may not continue building contracts. Homeowners should obtain independent legal advice. Home warranty insurance may apply.
Published on ASIC's published notices as a receivership or controller appointment
A company ceases to exist — either voluntarily after winding up, or by ASIC action where the company has failed to lodge annual returns or is no longer carrying on business
Any building contract with a deregistered company is with an entity that no longer exists. Recovery is extremely difficult.
The company's status on ASIC Connect changes to "Deregistered" with a deregistration date
Director history across related entities.
Company insolvency records are tied to the company's ACN. A director can be linked to multiple companies across different ACNs — some of which may have been wound up, placed into administration or deregistered. This information is available via ASIC Connect by searching the director's name as a person.
Patterns worth noting include a director who resigned from a company shortly before it was placed into external administration, or a director who has been associated with a series of companies in the same industry where each entity operated for a short period before being wound up.
ASIC has enforcement powers against directors who engage in phoenix activity — the practice of transferring assets from a failed company to a new entity to avoid paying creditors. Where ASIC has taken action, the outcome will be listed in ASIC's enforcement register.
What TrustSignal checks.
Current and historical ASIC notices for the builder entity
Director officeholder history across related ASIC-registered entities
Company status for all entities linked to the director
Dates and types of external administration for linked entities
Whether any linked entity was deregistered within a short period of incorporation