LCA and BAFE Certification When You Sell

Short answer

It depends mainly on how the sale is structured. In a share sale, the company that holds the LCA registration or BAFE certification stays the same, so the registration normally carries on, but you should expect to tell the LCA and your certification body about the change in ownership, and they may review it. In an asset sale, the buyer's company is a different legal entity, so it needs its own registration or certification. Confirm the position with the LCA and your certification body before you sign.

Share sale or asset sale: why it matters

In a share sale, the buyer buys your company's shares. The company itself, with its name, contracts, staff and registrations, carries on. In an asset sale, the buyer's company buys the business from your company, so anything held in your company's name has to be transferred, replaced or applied for again.

Registrations and certifications are almost always held by a legal entity, not by its owners. That is why the structure of the sale makes such a difference.

LCA registration

The Legionella Control Association is a voluntary, not-for-profit body, founded in 1999, whose members provide Legionella control services and products. Its Code of Conduct sets out what members must do, including:

registering every Legionella control service they offer;
an external audit each year, alongside annual re-registration;
keeping site records for at least five years after the work is done;
keeping training and competence records for staff.

The Code states that membership is only valid if the company named is listed in the LCA's online directory.

In a share sale, the named company does not change, so its membership normally continues. The Code of Conduct does not set out a specific procedure for a change of ownership, so contact the LCA secretariat to confirm what they need, and keep the annual re-registration and audit on schedule through the sale.

In an asset sale, the buyer's company is not the company named in the directory, so it cannot rely on your membership. It needs its own LCA membership for the services it will deliver.

BAFE certification

BAFE runs fire safety registration schemes, including SP203-1 for fire detection and fire alarm systems, SP203-4 for emergency lighting, SP101 for portable extinguishers and SP205 for fire risk assessment. Registration follows third-party certification by a UKAS-accredited certification body licensed by BAFE. For SP203-1, BAFE lists BSI, Independent European Certification, NICEIC, NSI and SSAIB. Registration only continues while the organisation holds valid certification.

Each certification body publishes its own scheme rules, and they expect to be told about significant changes. For example, NICEIC's SP203-1 scheme rules require a certified business to notify changes such as its legal constitution, trading title, address or financial status within 30 days. They also say that continued certification after a change is at the certification body's discretion, that certification can be transferred to another business only in limited circumstances, and that changes of ownership affecting the basis of certification can lead to suspension.

In a share sale, the certified business stays the same. Tell your certification body about the change of ownership within its deadline and expect it to check that you still meet the scheme.

In an asset sale, expect the buyer to need its own certification, which may mean a new application and assessment.

Other certifications and accreditations

The same logic applies to other third-party schemes, such as FIRAS and NSI, and to contractor accreditations, insurance policies and supply agreements. Each is held by a legal entity under its own rules, so list them all and check each one's requirements early.

What to check before you sell

Which legal entity holds each registration and certificate.
The renewal and audit dates for each, so none fall due at a difficult moment.
What each body requires on a change of ownership, and its notification deadline.
Whether the people named in your certification or whose competence it relies on will stay.
That your records, from risk assessments to service reports, are complete and easy to find.
Whether your buyer plans a share sale or an asset sale, and how it will handle each registration.

You can ask the LCA or your certification body about their process in general terms without naming a buyer.

Questions owners ask

Is LCA membership transferable to a new owner?

Membership is held by the company named in the LCA directory. In a share sale that company stays the same, so membership normally continues; the buyer's own company would need its own membership in an asset sale. Check with the LCA secretariat.

Do I have to tell my certification body if I sell my fire safety company?

Certification bodies expect to be told about significant changes. NICEIC's SP203-1 rules, for example, require changes such as legal constitution, trading title, address or financial status to be notified within 30 days. Check your own certification body's rules.

Can BAFE certification be transferred in an asset sale?

Generally not. Certification is held by a business, and scheme rules such as NICEIC's allow transfer to another business only in limited circumstances. In an asset sale, expect the buyer to need its own certification.

Sanjeev Desour is the founder of Richmonds, which buys UK water hygiene, water treatment and fire safety businesses from owners who want to retire. He founded IGNITE Academy in 2014 and runs the IGNITE Group of companies. LinkedIn

Sources

This guide is general information, not legal, tax or financial advice, and it is not an offer to buy any business. It reflects the rules and announcements known on the "last reviewed" date above. Tax rules and rates change, and announced changes may be altered before they become law, so take advice from your own accountant and solicitor before you act. Richmonds accepts no liability for decisions made on the basis of this guide. See our website terms.

What happens to LCA registration and BAFE certification when you sell your company?