Buying a Childcare Centre:

When you decide to buy a childcare centre, you should ensure that you have appropriate finance approved so that you know what your financial position is prior to entering into negotiations. Generally, you will need to obtain a licence in order to operate a childcare centre. The current licence may be transferrable on the sale of the childcare centre. Nevertheless, prior to obtaining a transfer of any childcare licence you will be required to obtain a suitability card appropriate for the State or Territory in which the childcare centre is located. It is recommended that the suitability card be obtained prior to entering into the contract to prevent the risk of future delays in the settlement of your transaction.

As with any business, an important factor to take into consideration when buying a childcare is profit and/or return on investment. Generally, profit in the childcare industry is determined by the number of licenced places, average occupancy, the fees charged per child and the cost of outgoings such as wages and insurance premiums.

At Navado, our experienced team of solicitors can assist in advising you a number of important matters relevant to the purchase of your new child care, including:

• Employment law issues- do you intend on retaining existing staff? If so, we can advise on the transfer of employee entitlements and on the terms of existing employment contracts and how these may be varied, if necessary. We can also advise as to minimum standards including wages and prepare new employment contracts for existing employees or any additional staff retained;
• Property law matters- if you are purchasing a child care centre which operates from a leased premise, you need to understand the obligations and entitlements of both landlord and tenant under the terms of the existing lease and ensure that the lease can in fact be transferred to a new business owner.  If you are considering undertaking any renovations or redeveloping the child care centre following your purchase, you should review the terms of any lease and determine if consent is required from the landlord and make enquiries with the local Council to determine the prospects of obtaining approval for your intended improvements to the centre;
• Licence requirements- you should be aware of the terms of the existing licence and, if required, apply for a new licence or transfer of the existing licence. You must understand and comply with any conditions associated with the licence, for example maximum occupancy of the child care centre and hours of operation;
• Insurance acquisition- you must be capable of obtaining the required insurances for the child care centre. Navado can provide advice as to the insurance required, minimum coverage necessary and advise on the applicable product disclosure statements and terms and conditions issued by your proposed insurer;
• Corporate structure- you should consider how you intend to purchase the child care centre. Do you propose to purchase the centre as an individual, in partnership with another party or as a company? We can provide advice as to the benefits and risks associated with each option and can subsequently prepare legal documentation required, such as an application form for the registration of a new company or the drafting of a partnership agreement;
• Child safety issues- you need to ensure that you understand your mandatory reporting obligations if you suspect a child is being abused or neglected and also ensure that you have a current clearance for Working With Children Check.  Our Solicitors at Navado can assist in informing you of your legal obligations and assist with the process of applying for clearance to work with children;
• Asset protection- to assist you in protecting your personal assets in the event that your move into the child care industry is unsuccessful or if litigation is commenced against the centre.

If you wish to speak with one of our Childcare Law Lawyers, please contact our firm by telephone on (02) 9233 4048 or send an email to info@navado.com.au. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.