How education business owners can prepare for a smooth sale

Due Diligence

If you’re planning to sell your education business, taking a few proactive steps now can save months of delay later.

Based on my experience working on M&A deals in the education sector, the following are common issues that could slow down your sale and how to rectify them early:

๐Ÿญ. ๐—˜๐—ป๐˜€๐˜‚๐—ฟ๐—ฒ ๐—ฝ๐—ฎ๐—ฟ๐˜๐—ป๐—ฒ๐—ฟ๐˜€๐—ต๐—ถ๐—ฝ ๐—ฎ๐—ด๐—ฟ๐—ฒ๐—ฒ๐—บ๐—ฒ๐—ป๐˜๐˜€ ๐—ฎ๐—ฟ๐—ฒ ๐˜‚๐—ฝ ๐˜๐—ผ ๐—ฑ๐—ฎ๐˜๐—ฒ

Education service providers or institutions often enter into agreements with one another to facilitate student enrolment. These agreements usually last a few years and are renewed if the collaboration remains viable.

Itโ€™s common for the parties to continue with the collaboration even after the initial agreements have technically expired. Buyers, however, will expect valid and current agreements to ensure continuity of operations and revenue after their acquisition.

Tracking and renewing the agreements now can avoid last-minute paperwork delay.

๐Ÿฎ. ๐—˜๐—ป๐˜€๐˜‚๐—ฟ๐—ฒ ๐—–๐—ฒ๐—ฟ๐˜๐—ถ๐—ณ๐—ถ๐—ฐ๐—ฎ๐˜๐—ฒ ๐—ผ๐—ณ ๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ฒ๐˜๐—ถ๐—ผ๐—ป ๐—ฎ๐—ป๐—ฑ ๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ถ๐—ฎ๐—ป๐—ฐ๐—ฒ (๐—–๐—–๐—–) ๐—ถ๐˜€ ๐—ฎ๐˜ƒ๐—ฎ๐—ถ๐—น๐—ฎ๐—ฏ๐—น๐—ฒ

Education service providers or institutions may own or rent buildings for their operations. It is an offence to occupy a building without a CCC under the Street, Drainage and Building Act 1974.

Make sure you or your landlord have the CCC ready to show the buyersโ€™ lawyers during legal due diligence.

๐Ÿฏ. ๐—–๐—ต๐—ฒ๐—ฐ๐—ธ ๐—ฎ๐—น๐—น ๐—ฟ๐—ฒ๐—ด๐˜‚๐—น๐—ฎ๐˜๐—ผ๐—ฟ๐˜† ๐—ฎ๐—ฝ๐—ฝ๐—ฟ๐—ผ๐˜ƒ๐—ฎ๐—น๐˜€ ๐—ฎ๐—ฟ๐—ฒ ๐—ถ๐—ป ๐—ฝ๐—น๐—ฎ๐—ฐ๐—ฒ

Depending on the nature of your business (e.g. colleges or tuition centres), registrations, accreditations and licences from the Ministry of Education, Ministry of Higher Education, Malaysian Qualifications Agency and local councils may be required.

Keeping these approvals up to date protects the reputation and value of your business and reduces the risk of penalties that could raise red flags for potential buyers.

Conducting these checks early can help avoid delays and ensure a smoother sale process.

#malaysiancorporatelawyer

This post was first posted onย LinkedIn on 2 May 2025.

Linkedin Post
Earn-out: A postponed dispute?

An earn-out is often the solution when a buyer and seller cannot agree on price. The seller believes the business is worth more than what the buyer is willing to pay upfront. So, the parties resolve the issue by deferring the portion of the price they cannot agree on, with …

Linkedin Post
The disclosure letter: Why founders selling their companies should not treat it as an afterthought

When founders sell their companies, the scope of legal work usually focuses on the share sale and purchase agreement (SPA). The disclosure letter is sometimes treated as secondary to the SPA but it should not have been the case. The disclosure letter sets out the exceptions to the sellersโ€™ representations …

Linkedin Post
Third-party consents in a share sale: What sellers should check before negotiating

When a company is sold, due diligence is usually conducted by the buyer, not the seller. That means the consents required from regulators, other shareholders, financiers or IP licensors to complete the sale are often only discovered when the buyer’s lawyers identify them during legal due diligence. By then, the …