Selling Your Childcare Business in NSW – How a Childcare Lawyer/ Business Lawyer Can Assist You

January 13, 2023



News & Insights

Related Articles


February 15, 2024



November 30, 2023

Whether you’ve begun the process or are contemplating a sale (or purchase), you will need a lawyer to advise, negotiate and draft the contract of sale on your behalf and manage the transaction until its completion. This article provides an overview of some key issues to consider in the legal process when selling a childcare business in New South Wales.


Due Diligence

Due diligence is vital for both vendors and purchasers and is a step that is not to be overlooked. As a vendor, you should take time to review your business to ensure that it is compliant and organized. Also, due diligence is important when assessing whether a prospective buyer is a good candidate. By examining their previous business experience, their qualifications and whether they have provider approval, due diligence will help you understand how long the process may take and decide if they are the right buyer for you. For instance, if the prospective purchaser does not have provider approval, there is a risk that the transaction may take longer to complete or that the sale may not proceed at all.


Provider and Service Approvals

A provider approval enables you to provide child services in general, and a service approval is unique to your individual childcare business. You would already have these approvals as they are mandatory for operating childcare businesses in NSW. Anyone can apply for a provider approval but only you are able transfer your business’ service approval to a new owner.

It is important that you sell your business to a buyer who holds a provider approval or is already in the process of obtaining one, as this means that the transfer of your service approval will more likely be granted. Without a provider approval, a buyer is not able to proceed with the sale.


Preparing the Contract

As the current owner of the childcare business, you may be asked to produce a contract of sale for a prospective buyer to consider. Before preparing the contract, your lawyer will require important information such as documentation the lease, list of equipment, and employee entitlements. This information may also assist with special conditions the contract can include, such as conditions that deal with the transfer of the service approval or how employees are managed after the transfer. 

It is essential that the contract includes specific provisions on transferring the service approval. Some other conditions in the sale contract regarding the transfer of the childcare business include clauses that ensure compliance with conditions and requirements of authorities such as the Australian Children’s Education & Care Quality Authority (ACECQA) and the Department of Education and Communities (DEC).


Finalising the Transaction

You must notify the parents of the children that receive services from the childcare about the sale two days before the transfer date. Additionally, the purchaser and you must write to the DEC notifying them of the sale within two business days of the transfer date. 

Whether it’s the paperwork, price or legal requirements, the childcare legal experts at Carneys Lawyers are fully equipped to help make the process as smooth as possible. Our lawyers are experienced in the area and will provide timely, professional and personalized advice catered to your business needs. 


Contact us Monday-Friday 8:30am-5:30pm via email or phone for a free initial consultation with one of our childcare legal experts.