If you own your daycare center as a sole proprietor, you can still sell your daycare, but the transaction must be structured as an asset purchase. Because a sole proprietorship is tied directly to you as an individual, the license cannot simply be transferred to a new owner. This means the buyer must completely re-license the facility with the Ontario Ministry of Education (MOE).
To do this, the buyer must go through every step of the process as if they are opening a brand-new location.
The Hurdles of Modern Compliance
One of the biggest hurdles in an asset purchase is that codes change over time. The buyer will often have to bring the entire physical setup up to the latest standards before an occupancy permit can be issued. For example:
- Fire arrangements and emergency layouts might need to be re-engineered.
- You might need to add a handicap-accessible washroom.
- The first floor may need to be retrofitted to meet modern accessibility requirements.
- An exterior ramp might be required for accessibility.
In short, building codes that didn’t exist when you first opened your doors may now be strictly enforced for the new buyer.
Ministry of Education Licensing Requirements
The items the MOE requires for issuing a new license in an asset purchase are identical to those for a brand-new facility. According to the Ontario Ministry of Education’s licensing guidelines under the Child Care and Early Years Act, 2014 (CCEYA), a new applicant must clear the following core checklist through the Child Care Licensing System (CCLS):
- Municipal and Building Approvals: Proof of proper zoning, current Ontario Building Code (OBC) compliance and occupancy permits, local fire department safety clearance, and Public Health sanitary/drinking water inspection sign-offs.
- Physical Space Compliance: Verification of indoor play space square footage, approved outdoor play areas with compliant fencing, and proper room segregation for different age groups (infants, toddlers, preschoolers).
- Administrative Documentation: A compliant Program Statement aligned with “How Does Learning Happen?”, comprehensive operating policies (anaphylaxis, safe arrival/dismissal, emergency management), and a detailed parent handbook and policies.
- Staffing and Background Checks: Vulnerable Sector Checks (VSC) for operators and staff, certified Registered Early Childhood Educators (RECE), and proof of approved supervisor qualifications and staff-to-child ratios.
What Happens to CWELCC?
If your daycare currently participates in the Canada-Wide Early Learning and Child Care (CWELCC) system, it is unlikely that the funding agreement will transfer with a new license.
Because a brand-new license is triggered by the asset purchase, the buyer loses the previous CWELCC enrollment and must reapply for CWELCC status as a brand-new entity subject to current provincial eligibility and availability.
