How To Start A Childcare Business In Australia: Legal Checklist

Starting a childcare business in Australia is rewarding, in-demand and genuinely impactful for families in your community.

Whether you’re opening a long day care centre, running family day care from home, or coordinating an OSHC or vacation care program, doing it right means more than setting up toys and taking enrolments.

You’ll need to choose the right business structure, secure approvals under the National Quality Framework, put strong contracts and policies in place, and stay compliant with consumer, employment and privacy laws.

This guide walks you through a practical, step-by-step legal checklist to start a childcare business in Australia with confidence, including specific tips for home-based care and family day care.

Planning And Feasibility: Set Your Vision And Model

A clear plan helps you avoid costly missteps and sets the foundation for compliance.

• Map your service model: Long day care, preschool/kindy, family day care, OSHC or occasional care? Your model influences premises, approvals, staffing ratios and policies.
• Research local demand: Who are your families (shift workers, infants, preschoolers, school-age)? What hours and services matter most?
• Understand the competition: Identify service gaps (longer hours, language programs, additional needs support, meals included).
• Define your point of difference: Curriculum approach (e.g. play-based, Montessori-inspired), extended hours, cultural focus, outdoor learning, or allied health partnerships.
• Build a practical business plan: Include fees and revenue assumptions, staffing and rosters, premises costs, insurance, risk management, and a compliance calendar.

Documenting your plan will also make licensing, financing and landlord negotiations much smoother.

Step-By-Step Legal Checklist To Start Your Childcare Business

1) Choose A Business Structure

Your structure affects liability, tax and how you scale.

• Sole trader: Simple and low-cost setup, but you’re personally liable for debts and claims.
• Partnership: Similar to sole trader but shared between partners (including shared liability).
• Company: Separate legal entity that can provide limited liability and is often preferred for centres planning to grow or bring in investors. You can set up a company through Sprintlaw if that suits your plans.

If you’ll have co-founders, factor in ownership, decision-making and exit planning early (e.g. with a shareholders’ agreement).

2) Register Your ABN, Name And (If Needed) Company

• ABN: Apply for an Australian Business Number so you can invoice, claim credits and register for GST if required.
• Business name: If you’ll trade under a name other than your personal name, register a business name.
• Company registration (if applicable): If operating as a company, complete ASIC registration and maintain company records and governance.

3) Secure Premises (For Centres and OSHC)

For centre-based services, your location impacts approvals, ratings and family demand.

• Zoning and planning: Confirm local council zoning allows childcare and obtain any development or change-of-use approvals.
• Lease or purchase: Negotiate terms carefully and arrange a commercial lease review so the fit-out, compliance obligations, make-good and rent reviews are clear.
• Fit-out and design: Align with National Regulations and the Building Code (consider room sizes, sanitary facilities, outdoor space, accessibility, egress, fencing and sightlines).

Home-based educators should also assess indoor and outdoor space, hazards, fencing, pets, pools, smoke alarms and evacuation routes.

4) Apply For Provider And Service Approval Under The NQF

All states and territories, including Western Australia, participate in the National Quality Framework (NQF), which is legislated by the Education and Care Services National Law and Regulations.

• Approved Provider: Individuals or entities operating services must be approved as providers by the relevant state or territory regulatory authority.
• Service Approval: Each childcare service location must have its own service approval.

Family day care educators typically do not apply for provider approval themselves. Instead, they work with or are engaged by an Approved Provider (the FDC scheme/agency) that holds the approvals and oversees compliance. If you plan to operate your own FDC service (an agency), you’ll need both approvals.

5) Meet Staffing Ratios, Qualifications And Checks

You must meet educator-to-child ratios and minimum qualification requirements set by the National Regulations (these vary by age group and service type).

• Educators generally require a Certificate III or Diploma in Early Childhood Education and Care, and larger centres require an Early Childhood Teacher.
• All staff must hold current Working With Children Checks (or equivalent), child first aid, and anaphylaxis/asthma training.
• Maintain recruitment records, induction, supervision, professional development and ongoing currency of checks.

6) Arrange Insurance, Systems And Safety

Consider public liability, professional indemnity (where relevant), property, workers compensation and motor vehicle cover if transporting children. Build systems for incident reporting, medication administration, child protection, food safety and emergency management.

7) Set Your Enrolment, Fees And Parent Communications

Set clear enrolment processes, waitlist rules, fee structures (including bond/deposit policies), absences, late collection charges and CCS administration. Your family-facing documents should be transparent and align with the Australian Consumer Law.

What Laws And Standards Apply To Childcare Businesses?

National Quality Framework (NQF)

The NQF sets the bar for quality and safety across Australia. It covers provider and service approvals, learning frameworks, educator ratios and qualifications, premises, policies, assessment and rating, and reporting obligations.

Duty Of Care And Safety

Childcare providers owe a legal duty to take reasonable steps to keep children safe. This cuts across supervision, risk assessments, maintenance, hygiene, behaviour guidance and responding to illness/injury. A quick primer on employer responsibilities is in Sprintlaw’s guide to duty of care.

Australian Consumer Law (ACL)

Your advertising, enrolment information, fee policies and parent communications must be accurate and not misleading. Be transparent about inclusions, exclusions, cancellation rules and refunds. See our overview of Australian Consumer Law principles for misleading or deceptive conduct.

Employment Law And Workplace Policies

If you hire staff, you must comply with Fair Work obligations, nominate the correct modern award, pay minimum entitlements and keep records. Put written contracts in place with each team member using an Employment Contract, and reinforce standards with a staff handbook, child-safety, leave and performance policies.

Privacy And Records

The Privacy Act 1988 generally applies to businesses with annual turnover of more than $3 million. However, many childcare providers choose to comply regardless, and some may be caught due to handling sensitive health information or because of other legal/contractual obligations.

Either way, you should be upfront with families about the personal information you collect (enrolment details, medical plans, incident reports, photos), how you store it, and who you disclose it to. A clear Privacy Policy helps set expectations and demonstrate good practice.

Intellectual Property And Brand

Protect your brand name and logo early. A trade mark can deter copycats and build trust with families. Consider registering your brand via trade mark registration and avoid adopting names too similar to other services.

Online Presence And Website Rules

If you take enquiries or enrolments online, include Website Terms that set acceptable use, IP ownership and liability limits. Sprintlaw offers Website Terms and Conditions tailored to service businesses.

Essential Legal Documents For Childcare Providers

• Family Enrolment Agreement: Sets the rules for enrolment, fees, CCS administration, attendance, health management, absences, late pickups, cancellations and termination.
• Service Policies And Procedures: Child-safe policy, supervision, excursions, sleep/rest, incident and injury, medication, food safety, behaviour guidance, emergencies and complaints handling.
• Employment Contract: Confirms role, award coverage, hours, pay, confidentiality, IP and termination for each employee. Use a written Employment Contract for every staff member.
• Staff Handbook: A central guide to your policies, expectations and safety standards. A documented handbook supports induction and consistent practice.
• Privacy Policy: Explains how you collect, store and disclose personal information about children and families. See Sprintlaw’s Privacy Policy service.
• Website Terms And Conditions: If you operate a website or parent portal, website terms reduce risk around content, enquiries and IP. Consider Website Terms and Conditions.
• Commercial Lease (for centres): Protects your occupancy and clarifies fit-out, outgoings, maintenance and make-good. Get a lease review before you sign.
• Photo/Media Consent Forms: Obtain written parental consent before using images for portfolios, displays or marketing.
• Third-Party Agreements: Contracts with food suppliers, cleaners, allied health professionals or excursion providers should set standards, insurance and responsibilities.
• Shareholders/Founders Documents (if applicable): If you have co-founders or investors, agree roles, decision-making and exits through appropriate company and shareholder documents.

Templates can miss important state-based requirements or gaps specific to your service model. It’s worth getting your suite tailored to how you actually operate.

Buying An Existing Centre Or Franchising: What To Know

Purchasing a running centre or joining a franchise can accelerate your launch, but it comes with extra legal steps.

Buying An Existing Centre

• Legal due diligence: Review approvals, compliance history, policies, incident records, employment and lease terms. Sprintlaw’s legal due diligence support can help identify risks early.
• Asset vs share sale: Understand what you’re buying (assets, contracts, staff, lease) and ensure consents and assignments occur before completion.
• Approvals and handover: Provider and service approvals are not automatically transferable. Plan timelines for any required applications, notifications and changeovers with the regulator and families.

Joining A Childcare Franchise

• Franchise documents: Carefully review the Disclosure Document, Franchise Agreement, operations manual and marketing fees. Consider an independent franchise agreement review.
• Costs and obligations: Initial fees, ongoing royalties, fit-out and compliance standards must be sustainable for your location and enrolment projections.
• Local approvals still apply: You’ll still need to meet NQF, planning and service approval requirements, even within a franchise model.

Whether you buy or franchise, plan a thorough transition to maintain quality, safety and trust with families.

Key Takeaways

• Starting a childcare business in Australia requires planning, the right structure, premises (if centre-based) and approvals under the National Quality Framework.
• All states and territories, including WA, participate in the NQF. You’ll need provider and service approval before enrolling children.
• Family day care educators generally operate under an Approved Provider (FDC agency); you only apply for provider approval if you’re establishing an FDC service yourself.
• Your obligations also include Australian Consumer Law transparency, robust duty of care and safety systems, correct employment arrangements and respectful handling of personal information.
• Protect your business with strong legal documents: enrolment agreement, policies, employment contracts, Privacy Policy, website terms and a well-negotiated lease.
• If you buy a centre or join a franchise, conduct careful legal due diligence and review all agreements so you understand obligations and risks.

If you would like a consultation on starting a childcare business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.