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# Commercial Friction & Personal Exposure: Interactive Risk Diagnostic

Assess your small business partnership liability and uncover immediate, high-value protection insights.

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### What This Tool Does

Evaluates commercial friction and personal financial liability within your business structure, exposing unhedged personal guarantees, statutory ATO risks, and equity mismatches. It delivers immediate, high-value risk insights to protect personal assets and maintain governance stability before partner conflicts arise.

### Who This Diagnostic Is For

- Pty Ltd Directors operating with co-shareholders, trade guarantees, or joint-and-several debt obligations.
- Partnerships & Trading Trusts managing uneven capital contributions, sweat equity, or informal partner agreements.
- Business Owners & Spouses with residential real estate pledged as bank collateral or secondary security.

### What This Tool Measures

- **Unprotected Exposure Gap ($):** Quantifies the net dollar mismatch between your unsecured capital investments and personal liability limits.
- **Director Penalty Notice (DPN) Exposure:** Maps personal liability risks triggered by Pay Day Super, BAS, and Single Touch Payroll reporting delays.
- **Spousal & Collateral Blindspots:** Highlights unsecured personal guarantee vulnerabilities attached to family real estate and unwritten wage continuation policies.

 > **Confidentiality Commitment:** Financial & operational inputs entered into this diagnostic are processed securely, stored confidentially, and used solely to calculate your custom risk metrics.

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## Partnership Exposure & Equity Diagnostic

Calculate your unprotected exposure gap and statutory DPN risk in under 2 minutes.

   **Business Entity Structure** \*   Pty Ltd Company (Multiple Directors/Shareholders)

  General / Traditional Partnership

  Sole Trader using Subcontractors or Staff

  Trading Trust (Unit or Discretionary Trust)

 Select your primary trading framework to identify your specific corporate, statutory, or joint liability exposure.

    **Everyday Pressure** \*   Key clients paying late (60+ day invoice defaults)

  Suppliers shortening payment terms or hiking prices

  Business partner off sick or taking unscheduled leave

  Disputed contract scope or unpaid project variations

  Cash flow tension around ATO BAS or super lodgments

 Select all active operational friction points currently impacting working capital or cash flow predictability.

 **Commercial Friction Detected:** You’ve experienced everyday operational pressure. Let's see how vulnerable your assets and family home becomes, if this friction escalates.

  **Operational Survival (Weeks/Days)** \*

**⚠️ Days 1–7: Initial Shock Alert**
Immediate working capital stress. High risk of trade credit suspensions, unexpected Cash-On-Delivery (COD) terms, or emergency payroll pressure.

**⚠️ Days 8–21: Statutory & Cash Squeeze Window**
Creditor defaults drain working capital, forcing trade-offs against payroll and statutory debts. Unpaid Pay Day Super or BAS lodgment delays start the clock on personal Director Penalty Notice (DPN) exposures.

**🚨 Days 22–30: Survival Cliff & Escalated Default**
High risk of cash flow collapse as liquid reserves exhaust. Unpaid fixed overheads trigger formal landlord lockout warnings, supplier credit cancellations, and default notices on bank-secured facilities.

**🛑 Days 31+: Automated ATO Escalation & Asset Exposure**
Extended cash failure triggers automated ATO flags through Single Touch Payroll & Pay Day Super data. Unpaid statutory obligations rapidly transition from operational risk to a high-probability reality: **Lockdown Director Penalty Notices (DPNs)** attach permanently to directors personally, putting family real estate and personal assets directly on the line.

  **Cash Lent to Business ($)** \*

  **Unpaid Sweat & Value ($)** \*

  **Walk-Away Number ($)**

   **Incapacitated Partner Wage Policy** \*   No written rule — If my partner is hurt or sick, full wage continues indefinitely

  Yes — We have a formal agreement capping wages for an inactive/injured partner

  Unsure — We've never discussed or documented a cutoff date

 Identify your documented governance rules regarding salary continuation when an active partner cannot contribute to daily operations.

 **⚡ The Unfunded Wage Drag**
Paying full wages indefinitely to an incapacitated partner without a formal agreement turns a health crisis into an un-bankable business debt. This practice rapidly depletes working capital and exposes the remaining healthy partner to trade defaults.

**✅ Governance Circuit-Breaker Active:** You've removed emotion from partner wage continuation. Ensure this cap is formally backed by Keyperson/Disability insurance so working capital isn't drawn down during the capped window.

**⚠️ De Facto Exposure Window:** Without a documented cutoff, businesses default to paying full wages during a partner illness out of goodwill. This creates intense interpersonal friction precisely when cash flow is under strain.

   **Personal Real Estate Guarantees** \*   My family home carries the primary mortgage / bank guarantee risk

  My partner's home carries the primary mortgage / bank guarantee risk

  Both of our homes carry equal bank guarantee risk

  Neither / No personal real estate is pledged as security

 Select which partner residential properties directly secure business banking facilities, overdrafts, or primary mortgages.

 **ℹ️ Asymmetric Partner Pressure:** While your home isn't directly pledged, carrying unequal collateral creates intense relational strain. Under financial pressure, the partner with real estate on the line often demands unilateral cash control to protect their asset.

**ℹ️ Symmetrical Collateral Exposure:** Equal bank guarantees align partner motivations, but double family exposure. A single operational default puts two independent family homes into bank recovery simultaneously.

**⚠️ Myth Buster: No Mortgage ≠ Zero Personal Risk**
Having no real estate pledged to a primary bank facility does *not* insulate your personal assets. Trade credit guarantees, landlord indemnity deeds, and automated ATO Director Penalty Notices (DPNs) attach directly to you personally, bypassing bank mortgages entirely.

   **Spousal Awareness Rating** \*   1 - Completely in the dark (Zero visibility into company debts)

  2 - Minor awareness (Knows business exists, no financial details)

  3 - Assumed awareness (General idea, haven't formally discussed guarantees)

  4 - High awareness (Reviews numbers, no signed guarantees)

  5 - Fully informed co-signatory (Complete visibility & joint involvement)

 Rate your partner's visibility into debts & guarantees (1 = Completely in the dark | 3 = Assumed awareness / haven't formally discussed | 5 = Fully informed co-signatory)

 **⚠️ Critical Spousal Blindspot Detected**
Your family home carries primary bank guarantee or mortgage risk, yet spousal awareness is low. In a default event, a spouse who signed standard guarantee documents without ongoing financial visibility faces sudden, personal asset recovery actions without prior warning.

  Message

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## Uncovered an Unprotected Business Risk Exposure Gap or ATO Risk?

Don't leave family real estate or partner liabilities to chance. Book a confidential, non-judgmental risk audit with our advisory team to establish legal and structural circuit-breakers before operational friction turns into personal liability.

 [ Schedule Your Confidential Risk Audit ](https://www.sapience.com.au/contact/us)