Change of ownership
Private training establishment change of ownership or governance
A range of scenarios constitute a "change of ownership". The type of change determines the level of the TEC's involvement with the PTE[1] involved.
It is most important that a purchaser, or merging PTEs, determine whether their changes will result in a new PTE seeking funding for the provision. Determining this beforehand will facilitate a faster turn-around by the NZQA[2] and the TEC, and avoid possible loss of registration, accreditation, and funding. For assistance, see the determining requirements section of this page.
Topics on this page
Timeframes
What is a change of ownership?
Determining requirements
Approval of funding when there is change of ownership
What new documents will be required
Allowing for wash-ups
Protection of learners' interests.
Rule GEN011[3] states that PTEs must notify the relevant government agencies at least 28 days before the planned date of a change of ownership or governance.
The application for registration post-change must be signed by the currently registered PTE.
If there is a change in the legal entity seeking funding, PTEs are advised to contact the relevant government agencies at the earliest stages of planning, to confirm continuation of funding for the provision subject to the sale and learner access to student support schemes.
Rule GEN010[4] identifies the types of changes that constitute a "change of ownership". Not all of these changes require intervention by the TEC. Requirements are discussed in the determining requirements section of this page.
Change of name only
NZQA needs to approve any change in name. PTEs must submit proposed names changes to NZQA, which will notify the TEC.
The types of change, and resulting actions required, can be divided into two broad groups:
- Changes that would result in the TEC funding the same legal entity for the provision as it funded before the change.
- Changes that would result in the TEC funding a different legal entity for the provision than it funded before the change.
In both cases the PTE must advise NZQA, which will follow its own procedures in relation to registration and accreditation.
Determining whether a new PTE will be seeking funding
The following situations do not result in a new PTE needing registration, accreditation, and funding approval:
- Purchase of shares in a PTE.
- Change in Directors of a PTE.
The following situations will result in a new PTE needing funding approval:
- A purchaser, not registered with the Companies Office, buying the business assets of the vendor PTE, resulting in a new company being registered with the Companies Office.
- A company registered with the Companies Office, but not currently registered with NZQA as a PTE, buying the business assets of the vendor PTE, and the buyer company seeking funding for the provision under its own name.
- An existing PTE buying the business assets of the vendor PTE, and seeking funding for the provision under its own name.
- Two or more PTEs merging to form a new PTE, with that PTE being registered as a new company with the Companies Office.
Which agencies will you need to work with?
If the same PTE is to be funded, the TEC does not require any information directly from the PTE. The PTE will need to notify NZQA.
If a different PTE, including a merged PTE, is to be funded for the provision in question, the TEC will need to assess, for funding approval, either an amendment to the relevant Investment Plan(s) or a new Investment Plan. PTEs should notify NZQA, who will advise the TEC of the proposed change. NZQA and the TEC will work together. The TEC will contact the PTE regarding the TEC's requirements. PTEs may notify the TEC at the same time they notify NZQA, if they wish.
If learners are studying with a new PTE, the PTE will need to inform StudyLink, to ensure ongoing learner access to student allowances and the Student Loan Scheme.
Consultation with stakeholders
If the proposed change involves a significant change to a PTE's provision, as described in its Investment Plan or funding approval, the existing or new PTE must consult with stakeholders over the proposed change. If there is simply a change in owners, with no change in provision, the existing or new PTE must advise stakeholders of the change.
The TEC will apply the same, published, decision-making criteria in assessing proposed amendments to an Investment Plan in a change of ownership as it applies in any other situation.
Entitlement to funding does not automatically transfer to a new PTE as a result of a change of ownership. However, the TEC will generally approve re-allocation of funding to the new PTE without further enquiry, once the specified prerequisites have been met, unless the TEC's monitoring or other information-gathering make further enquiry prudent.
The TEC recommends that new and potential owners fully familiarise themselves with their obligations and entitlements regarding the relevant types of funding they expect to receive from the TEC, especially if they are not currently receiving funding from the TEC. The PTEs section of this website may be helpful. Prospective owners should also refer to the NZQA website.
It should be noted that PTEs undergoing any change of ownership or governance must have NZQA registration to be eligible for funding from the TEC.
If the TEC approves funding of a new legal entity (PTE), it will agree the funding through an Investment Plan. New PTEs may be exempted from having an Investment Plan for a period of time.
If the TEC approves uptake of funding by a PTE already funded by the TEC, an amended Plan and/or Funding Agreement(s) may be required.
A vendor PTE continuing to seek funding, having sold only part of its business, may also need an amended Plan and/or Funding Agreement(s).
The TEC will apply wash-ups (funding adjustments between the PTE and the TEC made after processing of the December SDR[5]) to the PTE existing at the time of the wash-up. A wash-up may result in a debt to the TEC in the case of under-delivery. Financial consequences of wash-ups should be allowed for in the sale and purchase agreement.
Condition GEN012[6] states that the purchasing PTE is liable to the TEC for any outstanding dept.
The purchasing PTE will be responsible for ensuring a final SDR, where relevant to the provision, is submitted in relation to the provision being transferred.
When there is a change in the ownership or governance structure of a PTE, the PTE, and/or new PTE as appropriate, must protect the interests of its learners.
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Last changed:
19 January 2010