Transfer of Service Approval: Buying or Selling a Centre

Buying or selling an existing early childhood education and care (ECEC) service is rarely as simple as exchanging contracts and handing over the keys. The approval that allows a centre to legally operate sits with the approved provider, not with the building or the business name. That means a change of ownership almost always involves a transfer of service approval under the National Law, and getting this wrong can delay settlement or leave a buyer unable to trade.

This guide explains what a transfer of service approval is, why it isn’t automatic, and what buyers and sellers each need to plan for.

What a service approval actually is

Under the Education and Care Services National Law, two key approvals sit behind every centre: a provider approval (held by the person or entity running services) and a service approval (which authorises a specific service to operate at a specific premises). A service approval is linked to the provider who holds it.

When a centre changes hands, the incoming owner usually needs their own provider approval and then needs the service approval moved across to them. This is the “transfer of service approval.” It is a regulatory process, separate from the commercial sale agreement, and it is administered by your state or territory regulatory authority.

Why change of provider isn’t automatic

It’s a common and costly assumption that buying the business automatically brings the licence with it. It doesn’t. The regulatory authority needs to be satisfied that the new provider is suitable to operate the service before it will recognise them as responsible for it.

A few reasons the process is deliberately gated:

• The provider, not the premises, carries legal responsibility for children’s safety, staffing and compliance.
• The authority assesses whether the incoming provider meets fitness and propriety requirements.
• Continuity of care for enrolled children must be protected through the change.

Because of this, a transfer needs to be planned alongside the sale, not bolted on at the end.

The broad process and timing

While the specific steps, forms and notice periods depend on your state or territory regulatory authority, the general shape of a transfer looks like this:

1. The buyer ensures they hold (or applies for) a provider approval.
2. The transferring and receiving providers agree on a transfer date that aligns with settlement.
3. The required notifications are lodged with the regulatory authority within the relevant timeframes.
4. The authority processes the transfer and the receiving provider becomes responsible for the service from the transfer date.

Timing considerations

Timing is where deals most often come unstuck. Provider approval applications and transfer notifications each take time to process, and these timeframes are set by the regulator. Build genuine lead time into your settlement schedule rather than assuming approvals will keep pace with a quick exchange. Confirm current processing expectations directly with the regulatory authority for your jurisdiction before committing to dates.

Notifications

Both parties generally have notification obligations. The existing provider typically needs to notify the authority of the intended transfer, and the incoming provider needs to be recognised as the receiving provider. There are usually prescribed notice periods, and missing them can stall the transfer. Because the exact notices, channels and deadlines vary by jurisdiction, treat early contact with the regulator as a first step, not a formality.

What sellers need to do

If you’re selling, you can make your centre far more transferable by getting your house in order:

• Confirm your provider and service approvals are current and accurately reflect the premises and approved places.
• Compile compliance history, your most recent assessment and rating, and any conditions on the approval.
• Resolve outstanding compliance matters where you can, as these can surface in due diligence.
• Coordinate notification timing with the buyer so neither side misses a deadline.

A clean, well-documented approval position can support both your sale timeline and your price.

What buyers need to do

If you’re buying, your priorities are establishing your own standing as a provider and understanding exactly what you’re inheriting:

• Apply for or confirm your provider approval early, before you’re locked into settlement dates.
• Conduct thorough due diligence on the service approval, including any conditions, the rating history and compliance record.
• Verify approved places, premises details and waivers, since these attach to the service.
• Align the transfer date with settlement and lodge your notifications on time.

Common pitfalls

A few recurring traps catch people out:

• Assuming the licence simply comes with the sale.
• Leaving provider approval applications too late.
• Underestimating processing time and setting unrealistic settlement dates.
• Overlooking conditions or compliance history attached to the service approval.
• Poor coordination between buyer and seller on who lodges what, and when.

Most of these are avoidable with early planning and clear communication between both providers and the regulator.

This guide is general information, not legal advice.

Every transfer is different, and the right sequencing can be the difference between a smooth settlement and a stalled one. If you’re buying or selling a centre and want help mapping the approval process to your timeline, get in touch or read more about buying a childcare centre.