Education and Care Services National Regulations (NSW)

For the purposes of section 5C(2) of the Law, the Regulatory Authority, when making a related provider determination in relation to a provider (the first provider) and another provider (the second provider), being an approved provider, former provider or applicant for provider approval, must be satisfied one or more of the following circumstances apply—

25% or more of the persons from the first provider who are concerned in or take part in the management of the first provider are also concerned in or take part in the management of the second provider;

the first provider owns 15% or more of the second provider;

the first provider is entitled to receive 15% or more of any dividends paid by the second provider;

the first provider and the second provider are related bodies corporate within the meaning of section 50 of the Corporations Act 2001 of the Commonwealth;

the first provider and the second provider are associated entities;

the first provider and the second provider are acting in concert or jointly carrying out a business scheme or undertaking;

the first provider and the second provider are franchisees of the same franchisor;

the first provider has entered into an agreement with the second provider that may significantly affect the finance, governance or operations of either provider;

the first provider is a successor entity of the second provider;

Examples.

1 the people involved in management of the successor entity are substantially the same as the former provider

2 the successor entity uses the same, or a similar, business, particularly if the entity operates out of the same premises and has the same or similar assets, employees, bank accounts, websites or contact details

the first provider and the second provider are a group, or part of a group, of providers, taking into account any relevant information about the providers, which may include the following—

the providers have one or more persons with management or control of the service in common;

the providers have entered into a transaction to be associated with one another;

the providers have entered into agreements with a common third party who has, or will have, influence or control over the providers’ finance, governance or operations;

the providers are in negotiations to enter into an agreement to be associated with one another and either provider has made changes to the provider’s finance, governance or operations that may be attributed to the proposed agreement;

the providers use any corporate systems in common with one another, which may include the following—

HR systems;

finance systems;

compliance systems;

the providers are financially interdependent, which may be evidenced by common property, company loans, guarantees, cross charges or shared bank accounts;

a person or a group of persons controls or significantly influences the first provider and the second provider by any other means.

In circumstances where the Regulatory Authority is satisfied that a first provider and a second provider could have been determined to be related under subregulation (1), the Regulatory Authority may make a related provider determination that the first provider and a successor entity to the second provider are related.

For subregulation (1)(e), the providers are associated entities if the first provider is related to the second provider because—

the first provider controls the second provider; or

the first provider has significant influence over the second provider; or

the second provider controls the first provider; or

the second provider has significant influence over the first provider; or

another entity controls or significantly influences both the first provider and the second provider.

In this regulation—

control means the capacity of a provider to determine the outcome of decisions about another provider’s financial or operating policies or to influence decisions about financial or operating policies where—

capacity is determined by the practical influence a provider can exert (rather than the rights it can enforce); and

control or influence is evidenced by a practice or pattern of behaviour affecting a provider’s financial or operating policies (even if it involves a breach of an agreement or a breach of trust).