Buying and Selling a CRICOS College – What you must know!
As we approach more than a year of living with COVID19, I have observed the changes in the services that colleges are seeking consultants. As a business agent as well as a CRICOS consultant, I meet with business owners who see the current COVID19 challenges as an opportunity. Therefore, consultants, like myself other than working on curriculum design, compliance and initial CRICOS applications, I have been assisting in helping clients with Changes of Ownership application for clients.
The things you must know when you are going through the change of ownership of your CRICOS college is that:
- the current climate of the CRICOS market is a painful time for cash-poor owners, whereas it is a once in a lifetime opportunity for cashed-up business people.
- Changes to the submission requirements have changed since October 2019. Now, in order to submit changes of ownership you need to complete:
- Self-assessment tools for changes of ownership
- Financial Viability Risk Assessment Requirements and
- Fit and Proper Person Requirements
The above information is common knowledge when speaking with clients. However, one thing that most of them are not clear about is when to inform ASQA about the changes. Some clients think that the new owner can submit the changes of ownership application. This is not entirely inaccurate information, however, for the new owner to ensure all the required documents are ready within the required timeframe can be an impossible task.
According to the ESOS Act 2000, Part 3, Division 1, Section 17A (3), colleges are required to notify ASQA within 10 business days of the change taking effect; or as soon as practicable before the change takes effect.
Unless the new owner has done the due diligence during the transaction period, and has identified the areas for improvement, and requested the updated documents, it will be difficult to have all the documents ready within 10 business days of the change taking effect.
As a licenced business agent, I understand when a buyer finds a seller or vice versa, you wish to make the transaction as fast as you can. So, my advice to you is, if you are considering selling your CRICOS business, conduct an internal audit of your college and its documentation as per the self-assessment tool for changes of ownership. You can access it at https://www.asqa.gov.au/resources/guides/self-assessment-tool-change-ownership. That way, when you do find an ideal buyer, the transaction can proceed without delay, and yourself and the buyer will not breach the ESOS requirement.
If you are in a position of selling due to the challenges of COVID19, it is not the end of the world. I sold my ELICOS college that I had established and operated for nearly 10 years. And the buyer probably made a hundred times more money than I had with my college! But you know what? It was one of the best decisions of my life. I realised I enjoy helping colleges more than running a college.
I hope you can continue doing what you love and find happiness even in the midst of this challenging time. I wish you the best of luck!
Yours sincerely,
Michelle Lee