Buying or selling an RTO?

Posted on January 10th, 2018

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If you are buying or selling a Registered Training Organisation (“RTO“) it is very important you engage a competent solicitor who has experience in dealing with RTOs.

In addition to dealing with the usual sale of business considerations, including without limitation:

  • Stock,
  • Goodwill,
  • Plant & Equipment (including discharging securities),
  • Restraints,
  • Employees,
  • Leases/Licence Agreements/Supplier Agreements/Franchise Agreements, and
  • Intellectual Property;

The sale or purchase of an RTO must also deal with the government department known as the Australian Skill Quality Authority (“ASQA”). 

The sale or purchase of an RTO must receive the approval of ASQA. ASQA’s approval is not like most other authority approvals as ASQA’s approval cannot be obtained as a pre-condition to completion. This means that ASQA’s approval can only be obtained after the sale or purchase has completed.

This creates a number of legal risks for the parties, for example, what if ASQA does not approve the transaction – what happens then?

There are a number of techniques that can be implemented by a competent solicitor with RTO experience designed to reduce the risk associated with ASQA’s approval process. Unless your solicitor is familiar with these processes and techniques, it is likely that you will be seriously exposed to loss during and after the transaction.

The writer has the experience and techniques to provide you with the required legal representation needed when buying or selling an RTO. Please contact our office if you or your clients require our assistance.

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