Standard Business Sponsorship refused: the five grounds, what the refusal does to the nomination and the worker, which money comes back, and whether to review or reapply

MARN 1576536

What the Department must be satisfied of

Approval as a Standard Business Sponsor is a decision under the Act and the Regulations, and the Department approves the application only if it is satisfied of each criterion: that the applicant is lawfully operating a business in Australia, or is an overseas business in the limited case the overseas sponsor route allows; that there is no adverse information known to the Department about the applicant or a person associated with the applicant, or that it is reasonable to disregard the adverse information there is; that the applicant has the capacity to comply with the sponsorship obligations, read in practice from the business's financial position and its record; and that the applicant is not subject to a bar on applying for approval. The former training benchmark criterion no longer applies, the training levy having replaced it, and an application refused on training was refused under the old rules. The application is made with the evidence that satisfies each criterion, and a refusal is the Department's finding that one was not satisfied on the material before it, which is the point: the refusal letter is read for which criterion and on what material, because the response is different for each. The step-by-step guide sets out the evidence the application should have carried.

Ground one: not lawfully and actively operating

The most common ground for a small or new business. The Department must be satisfied that the business is lawfully operating in Australia, which it reads as actively trading as a business, lawfully, at the time of the application, and the evidence it expects is the registration documents, the ABN and the ASIC or business name record, the financial statements and the business activity statements for the recent period, the bank statements showing trading, the lease or the premises, the employment records and the payroll, the contracts, invoices and customers, and for a licensed trade the licence. A business registered months ago with no lodged activity statement, no payroll and a plan, a business that trades through a different entity from the one that applied, a business whose activity is a director's hobby or a vehicle for the sponsorship itself, and a business whose records show no trading in the recent quarter, fail the test on the evidence, and a refusal on this ground says that the Department was not satisfied the business was operating. The new business guide describes what a start-up provides instead of the trading history, and the entity guide covers the business that applied through the wrong entity. The cure for this ground is evidence, and a fresh application with the activity statements, the payroll and the contracts that were missing is approved where the first was refused.

Ground two: adverse information

The Regulations define adverse information about a person as information that the person has contravened a law of the Commonwealth, a state or a territory, has been investigated, prosecuted, found to have contravened or penalised under such a law, is the subject of an infringement notice, is or was insolvent, under administration or the subject of a winding up, or has been found by a court or a tribunal to have engaged in conduct that bears on sponsorship, and it extends to a person associated with the applicant, which includes the directors, officers, partners and trustees, a person with a controlling interest, and an entity in which those people are involved. The laws that matter in practice are workplace law, a Fair Work Ombudsman finding or an underpayment order, migration law, a previous sponsor sanction or an employer compliance finding, tax law, workplace safety law, and corporations law, a director's disqualification or a company's liquidation. The Department may disregard adverse information where it considers it reasonable to, having regard to the time since, the seriousness, whether it was remedied, and whether it bears on the business's suitability as a sponsor, and the application that discloses the matter and puts the case for disregarding it, with the remediation evidenced, is in a far better position than one in which the Department found it. A refusal on adverse information says what the information was; a business that disputes the information, or says it should have been disregarded, has the review route, and a business whose adverse information is real and recent reads the sanctions guide for what a bar looks like from the other side. Liquidation of a related company, a director's earlier bankruptcy, a safety prosecution three years ago, a Fair Work order that was paid, are the common examples, and each is argued on its facts.

Ground three: capacity to meet the obligations

The sponsor undertakes obligations that cost money: the nominated salary at the market rate for the life of the sponsorship, the training levy with each nomination, the worker's return travel costs on request, the costs of the sponsorship that cannot be recovered, and the records and notifications that take time. The Department reads whether the business can meet them from its financial statements, its cash position, its turnover against the salaries it proposes, and its history, and a business whose accounts show losses, negative equity, overdue tax and a proposed salary that equals its annual revenue is refused on capacity, as is a business that could not explain how the salary would be paid. The cure is the financial evidence that shows capacity, an accountant's letter where the accounts do not speak for themselves, evidence of funding, contracts or a parent's commitment, and a nomination at a salary the business can actually pay; a business that was refused on capacity and reapplies with the same accounts and the same salary is refused again.

Ground four: a bar from an earlier sanction

A business that was previously an approved sponsor and was barred from applying for approval as a sponsor for a period, as a sanction for a breach of its obligations, cannot be approved while the bar runs, and a business that applies within the period is refused on that ground; the bar can also attach to associated entities and persons, so that a new company with the same directors as a barred one is read as the barred sponsor by another name. The refusal on this ground is not cured by evidence, only by the expiry of the bar or its removal on review, and a business that was barred and did not seek review within the period has the expiry to wait for. The sanctions guide covers the bar, its period and its review.

Ground five: the request that was not answered

Many refusals are not about the business at all. The Department sent a request for information, for the activity statements, for the financials, for an explanation of a director's history, for the lease, with a period to respond, to the email address on the application or to the agent, and the response did not arrive: the address was wrong or unmonitored, the agent did not pass it on, the business thought it had time, or the documents could not be gathered in the period and no extension was sought. The Department decides on the material it has, which does not satisfy the criterion the request was about, and refuses. The cure is simple and the lesson is simpler: a fresh application with the documents, lodged with an address that is monitored, and an extension sought in writing before any period ends; a business that was refused for not answering does not seek review, because the Tribunal would be reading evidence the Department never had, and reapplies.

Reading the refusal letter

The refusal letter states the decision, the criterion the Department was not satisfied of, the findings of fact and the evidence they rest on, the review rights and the period within which an application for review must be lodged, and the date of the decision from which the period runs. It is read in that order, and the first question is which criterion: operating, adverse information, capacity, bar or unanswered request. The second is whether the finding is wrong on the evidence the Department had, which points to review, or right on that evidence and curable with more, which points to reapplying. The third is the date and the period, because review is lost if the period passes, and a business that wants to keep both options open lodges the review application within the period while preparing the fresh application. A refusal letter that lists several criteria is read for each, and a business that is refused on adverse information and on operating has two different problems with two different cures.

What the refusal does to the nomination and the worker

A nomination can be approved only where the nominator is an approved sponsor, so a nomination lodged with the sponsorship application, or after it in reliance on it, is refused or cannot be approved when the sponsorship is refused, and a visa application lodged on that nomination falls with it, with the worker's visa refused on the nomination ground. The worker's position then depends on where they are and what they hold: a worker offshore waits for the fresh sponsorship and nomination; a worker in Australia on a visa with time left, a student, a working holiday maker, a 482 holder with another sponsor, waits on that visa, with the 180-day rule running for a 482 holder who has left their previous sponsor; a worker on a bridging visa tied to the refused visa application has the bridging visa end in the ordinary way after the refusal, and must act. The employer tells the worker the day the refusal arrives, with the plan and the timing, because the worker's own decisions, whether to seek review of the visa refusal, whether to look for another sponsor, whether to leave and return, turn on how fast the employer can fix the sponsorship, and the 180-day guide is the worker's reading. The worker cannot start, or continue, working for the business on the strength of a refused sponsorship unless their current visa allows it, and an employer who lets them has an unlawful employee and an adverse fact for the fresh application.

The money

The sponsorship application charge is not refunded on refusal, and the fresh application pays it again. The nomination application charge is not refunded in the ordinary case. The Skilling Australians Fund levy, paid with the nomination, is refunded where the sponsorship application was refused, which is one of the grounds the Regulations list, on an application by the sponsor, and the levy guide covers the grounds and the form; a sponsor that reapplies and nominates again pays the levy again and claims the first. The worker's visa application charge is refunded only in the narrow cases the refund guide lists, and a visa refused because the nomination fell is not among them in the ordinary case, so a worker who lodged the visa before the sponsorship was approved loses that charge, which is why, where the worker's visa has time, the visa is lodged after the sponsorship and the nomination are approved; where the worker's visa is expiring and the three stages must be lodged together, the worker understands the risk before paying. No part of any of this is recovered from the worker.

Review at the Tribunal

A decision to refuse approval as a Standard Business Sponsor is reviewable by the Administrative Review Tribunal on application by the business within the period stated in the refusal notice, which is short and is not extended; the Tribunal reviews the decision on the merits, with the evidence the business puts before it including evidence that was not before the Department, and can affirm the refusal, set it aside and substitute approval, or remit the matter to the Department. Review suits the refusal the business says was wrong: adverse information that is disputed or should have been disregarded, a finding that the business was not operating when the evidence showed it was, a capacity finding that misread the accounts. It takes time, months to more than a year depending on the Tribunal's list, during which the business has no sponsorship, and a business whose refusal is curable usually reapplies instead, or does both. The linked refusals matter: a nomination refused because the sponsorship was refused, and a visa refused because the nomination was, each have their own review rights and periods, and a worker who wants their visa refusal reviewed needs the nomination refusal under review too, since the Tribunal has held that it cannot review a visa refusal on the nomination ground where the nomination refusal was not itself taken to review. The Tribunal guide covers the process, the fee and the period.

Reapplying with the gap filled

A fresh sponsorship application can be lodged at any time unless a bar applies, with a new charge, and it is the faster route for most refusals: the operating ground answered with the activity statements, payroll, contracts and bank records that were missing; the capacity ground answered with the accounts, the funding and a realistic salary; the unanswered request answered; the adverse information disclosed with the case for disregarding it and the remediation evidenced. The fresh application is read against the refusal, so it addresses the refusal's findings directly, in a covering statement that says what was found, what has changed and what is now provided, rather than lodging the same file and hoping for a different officer; and it is lodged with a nomination and, where the worker's visa allows, the visa application once the sponsorship is approved. A business that reapplies with the same evidence receives the same decision, and a business that was refused on adverse information and reapplies without disclosing it receives a worse one. The fresh application is also the moment to fix the things the first one revealed: the address that was not monitored, the agent who did not respond, the entity that was the wrong one, the salary that could not be paid.

The refusal checklist

1. Read the letter for the criterion, the findings, the decision date and the review period; diarise the period.
2. Tell the worker the same day, with the plan and the timing; confirm what visa they hold and whether it lets them work for you now.
3. Decide: a finding that was wrong on the evidence points to review within the period; a finding that was right on thin evidence points to a fresh application.
4. For the operating ground, gather the activity statements, payroll, contracts, lease and bank records; for capacity, the accounts, funding and a salary the business can pay.
5. For adverse information, disclose it in the fresh application with the remediation and the case for disregarding it.
6. For a bar, read its period; nothing else cures it.
7. Claim the levy refund for the nomination that fell; expect the sponsorship and nomination charges to be lost.
8. Lodge the fresh application with a monitored address and an agent who answers requests, and the nomination with it.

General information only, current at October 2026; not advice on your own case. The criteria for approval as a Standard Business Sponsor in regulation 2.59 of the Migration Regulations 1994, the definitions of adverse information and associated person in regulations 1.13A and 1.13B, the sponsorship obligations in Division 2.19, the review provisions of the Migration Act 1958 and the Administrative Review Tribunal Act 2024, the Skilling Australians Fund levy refund provisions, and the Department’s published sponsorship policy, all as in force at the date above. Outcomes depend on the Department’s assessment of each application; no registered migration agent can guarantee a result (Code of Conduct, Migration Agents Regulations). Keshab Chapagain, MARN 1576536.