What happens to your Ofsted registration when you sell a nursery?

When we speak to nursery owners who are starting to think about selling, the Ofsted question comes up early and often. Can I transfer my registration? Will the buyer get my rating? What happens if there's a gap? The answers depend on how the sale is structured, and getting the detail wrong can add months to the process.

If you've been running a nursery for any length of time, you'll know that Ofsted registration belongs to the registered person, not the building or the business. That's the starting point for understanding how registration works in a sale.

Share sale vs asset sale: two very different processes

In a share sale, the buyer purchases the shares of the limited company that holds the Ofsted registration. The company doesn't change. The registration stays in place. The buyer simply notifies Ofsted of any changes to directors or the nominated individual after completion. There's no new application, no registration visit, and no gap in provision.

In an asset sale, the buyer is a different legal entity. They're purchasing the premises (or the lease), the equipment, the goodwill, and through TUPE, the staff. But the Ofsted registration stays with your company. The buyer must apply to Ofsted for their own registration from scratch, and your setting cannot operate under their ownership until that registration is granted.

This is a critical distinction because nursery owners often tell us they assumed their registration would simply carry over. It doesn't in an asset sale. And the timeline for a new Ofsted registration can be significant.

How long does registration take?

Ofsted aims to complete registrations within 25 weeks of receiving a valid application, though recent government guidance suggests an average of around 12 weeks for straightforward cases. In practice, we've seen it vary quite widely depending on the completeness of the application, the speed of DBS checks, and Ofsted's own scheduling for the registration visit.

For a nursery asset sale, this timeline is the single biggest factor in how the transaction is structured. Most deals use split exchange and completion, where both parties sign the sale agreement and exchange contracts, but completion is conditional on the buyer obtaining Ofsted registration. During that period, you continue to operate the nursery as normal. You remain the registered person. You remain responsible for the quality of provision.

The buyer's application needs to include the EYO form (to register the nursery) and EY2 forms for everyone who'll hold a governance position (directors, trustees, committee members, the nominated individual). Each of those individuals will need enhanced DBS checks with barred list checks. If any of those forms are incomplete or checks are outstanding, the application won't progress, and that's where delays most commonly occur.

One practical point that catches some sellers off guard: the seller remains responsible for childcare until they formally resign their registration with Ofsted. If you want continuity for children and families, you may choose to delay that resignation until Ofsted has issued the buyer's registration certificate. If you resign before the buyer is registered, the setting must stop operating. In a nursery where parents rely on you for childcare five days a week, that gap is not just an administrative problem. It's a reputational one.

What happens to your Ofsted rating?

When a setting transfers to a new provider through an asset sale, Ofsted displays the setting's inspection history on its reports site for five years. So the buyer inherits the visible track record, even though the registration is new. Parents searching for the nursery online will still see previous reports and ratings, with a note that they were awarded under the previous provider.

However, the new provider doesn't carry that rating forward in any formal sense. Their first inspection will typically happen within 30 months of registration. Until then, the setting is technically unrated under the new provider.

For sellers, the implication is straightforward: your Ofsted rating directly affects the attractiveness and value of your nursery. An Outstanding or Good rating gives buyers confidence, reassures parents during the transition, and supports the buyer's ability to maintain occupancy. A Requires Improvement rating doesn't prevent a sale, but buyers will want to understand the context and may factor it into the price.

In a share sale, none of this applies. The rating stays with the company because the registration hasn't changed. That continuity is one of the reasons buyers in the nursery sector often prefer share purchases, despite the other complexities they bring.

The nominated individual question

Every nursery registered as an organisation must have a nominated individual who acts as the main point of contact with Ofsted. In many owner-operated nurseries, the owner is also the nominated individual. When you sell, that creates a question that needs answering before completion.

In a share sale, the nominated individual can be changed by notifying Ofsted after completion. The buyer appoints a new person, that person submits an EY2 form and DBS check, and once approved, they take over the role. Some sale agreements include a clause requiring the outgoing owner to remain as nominated individual for a short transitional period to ensure continuity.

In an asset sale, the buyer's application must include their proposed nominated individual from the outset. If that person isn't ready, or their DBS check is delayed, the entire registration stalls.

From conversations we've had with nursery owners who've been through a sale, this is one of the areas where preparation makes the biggest difference. Having the buyer's nominated individual identified, DBS-checked, and ready to go before the application is submitted can save weeks.

Planning permission and other surprises

One issue that comes up regularly in nursery sales, and which has nothing to do with Ofsted itself, is planning permission. Many nurseries operate under specific planning conditions that restrict the number of children, the hours of operation, or the use of outdoor space. These conditions may have been set years ago and may not reflect how the nursery actually operates today.

Buyers will check this during due diligence, and if there's a mismatch between your planning permission and your current operation, it becomes a problem. Not an insurmountable one, but the kind that adds time and cost if it's discovered mid-transaction rather than addressed beforehand.

What this means for your sale

Ofsted registration is manageable, but it shapes the timeline and structure of your nursery sale in ways that are worth understanding early. Whether you're likely to pursue a share sale or an asset sale, the registration implications should be part of the conversation from the start, not something your lawyers have to untangle three months in.

Our free valuation calculator can give you an initial sense of what your nursery might be worth. If you'd like to talk through how the regulatory side fits into your specific situation, James is always happy to have a confidential conversation.