Incorporation, amalgamation of corporations, sales of child care centre or sale of assets – new licence required

Per subsection 20(5) of the CCEYA, a licence issued under the Act is not transferable. This means that when the legal entity (which could be an individual or corporation) responsible for the operation and management of the child care centre changes, a new licence is required. There are different situations where this can happen:

  • an individual licensee chooses to sell their child care centre to a corporation or another individual
  • an individual licensee chooses to become incorporated
  • an incorporated licensee chooses to sell some of the assets of their child care centre. The purchaser buys some of the assets of the child care centre as specified in the sale agreement but does not acquire the corporation which is licensed to operate the child care centre (note that the licence issued by the Ministry of Education is not an asset that can be sold or transferred)
  • a licensee is incorporated and wants to amalgamate with one or more other corporations and continue as one corporation

In any situation above where there is an effect on existing corporation or an individual wants to become incorporated, the first step is to refer to the provincial Business Corporations Act and learn about what needs to be done to file the changes to the corporation in question with the Ministry of Public and Business Service Delivery (or any successor of that ministry).

Important information: there is no guarantee that the proposed future licensee will continue be licensed.

When the legal entity holding the licence for a centre is going to change, to minimize disruption in service for families and ensure a smooth transition process, the current licensee must give advance notice of to the Ministry of Education. The current licensee must notify their program advisor in writing of their intent at least 30 days before the tentative closing date of the incorporation, amalgamation or sale of centres or assets. The notification should include, at a minimum, the following information:

  • tentative closing date for the arrangement that is going to happen
  • name of the prospective future licensee, and,
  • plans to inform parents, staff and the service system manager of the upcoming change in the legal entity operating the child care program

Once the ministry knows who the new owner/corporation will be, the ministry program advisor will reach out to the potential future licensee to let them know what steps are involved, what documentation needs to be gathered and provided and any additional information that may be helpful in the application process.

Following the initial contact from the ministry program advisor, the legal entity that would be running the child care centre must initiate the licensing process as if they were an initial applicant for a licence, starting by registering with the Child Care Licensing System; refer to:

The new applicant must also pay the application fee.

Important information: if the current licence will be expiring soon, it is best to minimize disruption for the families who have children receiving child care by applying for a licence renewal. In this scenario, the program advisor will conduct a licensing inspection with both the current licensee and the future licensee present. If there are things that need to be addressed coming out of the inspection by the program advisor, the current licensee and the future licensee must decide who is responsible with complying with any outstanding requirements. After all requirements have been met (which may be confirmed by another licensing inspection) and the future licensee has completed the application process, if approved by the ministry director, a new licence will be issued through CCLS and must be printed and posted in the child care centre, along with the decal that will be provided by the ministry.

Once the current licensee is no longer operating the child care program, they must return their licence and decal to the ministry.

Incorporation, amalgamation of corporations, sales of child care centre or sale of assets – Canada-wide Early Learning and Child Care (CWELCC) system

When the legal entity (which could be an individual or corporation) responsible for the operation and management of the child care centre changes, the new entity must apply to their service system manager if they want to enroll in CWELCC.

Sale of Shares – new licence not required

When an incorporated licensee sells some or all of the shares of their corporation, a new licence is not required because the legal entity responsible for the operation and management of the child care centre does not change.

Regardless, the current licensee must contact their program advisor to let them know what is happening and so the licensee and program advisor can discuss what needs to be done.