Selling, buying or restructuring a business with sponsored workers: what carries across, what does not, and the sequence that keeps every worker lawful at settlement

MARN 1576536

What the sponsorship attaches to

A standard business sponsorship is approved to the applicant, a legal person identified by its name, its ABN and its registration, for five years, and a nomination is made by that sponsor for a position in that sponsor's business; condition 8607 on the worker's 482 requires the worker to work only for the sponsor that nominated them, or an associated entity where the regulations allow, in the nominated occupation. The approval is not property, cannot be transferred or assigned, and does not follow the business, the premises, the customers or the staff; it follows the legal person, and the question in every sale and restructure is whether the legal person that employs the workers after the change is the one that was approved and nominated. The structures guide covers who the legal person is for each structure.

A sale of shares

A buyer who acquires the shares in the company that holds the sponsorship acquires the company, which remains the employer, the sponsor and the nominator, with the same ABN; the sponsorship and the nominations continue, the workers' condition 8607 is met, and the transaction is, for the Department, a change in the company's ownership and directors that the sponsorship obligations require the sponsor to notify within 28 days, with the new directors' details. The buyer inherits the sponsorship's standing and its history, including any breaches, bars and adverse information, which is why a share purchase of a company with sponsored workers includes due diligence on the sponsorship as on the tax. A share sale that is followed by a transfer of the employees to another entity in the buyer's group, for payroll or structural reasons, is an asset-style transfer for the workers and needs new nominations, and a buyer who plans that tells the agent.

A sale of assets

A buyer who acquires the business as assets, the goodwill, the equipment, the lease, the contracts and the staff, through its own entity employs the staff from settlement in that entity, which has no sponsorship and has nominated no one; the sponsored workers are, from settlement, employed by a non-sponsor, in breach of condition 8607, with their visas liable to cancellation and their 186 pathways interrupted, and the seller has ceased to employ them and must notify the Department within 28 days. The remedy is that the buyer's entity applies for standard business sponsorship as soon as the deal is agreed, showing that it will lawfully operate the business from settlement through the sale contract, the seller's records and its own, lodges a nomination for each sponsored worker it will keep, with labour market testing unless the worker's nationality or the position is exempt and with the levy, timed so that the nominations are lodged before settlement and ideally approved, and notifies the Department of the change; the workers then transfer on the nominations once approved, and the Department's practice covers the short gap where the sequence was planned and notified. The transfer guide covers the new nomination, and the exemptions guide whether the buyer must advertise.

Incorporation, a change of trustee, a new partnership

A sole trader who incorporates, a trust whose trustee is replaced, a partnership that reconstitutes with a new ABN, and a business that moves its employees from one entity to another within the owner's own structure have each, for the Department, created a new employer that has not nominated the workers, and the position is the asset sale's: the new entity applies for sponsorship and nominates before the change, the old entity notifies, and the sequence is planned with the accountant who proposed the change. These changes are made for tax, succession and asset protection reasons without anyone considering the visas, and the sponsored worker who asks the question at the Christmas party has often been in breach since July. A change of the sponsor's name, address or directors, without a change of the legal person, is a notification and nothing more.

A merger or a group transfer

A merger in which one company survives and the other's business and staff move into it is an asset transfer for the staff of the company that does not survive, who need new nominations by the survivor, while the survivor's own sponsored workers continue; a merger by share acquisition that leaves both companies in existence changes nothing until the staff are consolidated. A transfer of a sponsored worker between entities in a corporate group is permitted without a new nomination only where the regulations' associated entity provisions apply and the Department's rules on the sponsor's associated entities are met, which the consultation reads for the group, and otherwise needs a new nomination by the receiving entity. A group that holds the sponsorship in a holding company and employs through subsidiaries reads the associated entity rules before the first nomination, since the sponsor must be the employer or an associated entity of it.

The buyer's due diligence

• The sponsorship approval, its date, its expiry, and whether it is standard or accredited.
• Each nomination: the worker, the occupation, the nominated salary, the approval date, and whether the worker's actual role and pay match it.
• Each worker's visa: the subclass, the grant and expiry dates, the conditions, and any pending application, including a 186.
• The sponsor's compliance: the notifications made, the records kept, any monitoring, any warning, bar, infringement notice or adverse finding, and any Fair Work matter.
• Underpayment: whether each sponsored worker has been paid the nominated salary and the award, because a buyer who inherits underpaid sponsored workers inherits the back pay under the transfer of business rules and the Department's adverse information.
• Cost recovery: whether the seller recovered sponsorship costs from the workers, which is a breach that follows the workers' files.
• The workers' intentions: whether each will transfer, since a nomination is for a worker who will come.

A share purchase inherits all of it; an asset purchase inherits the underpayment and the workers' histories and starts the sponsorship fresh. The obligations guide covers what the Department will look at.

The seller's obligations

A seller that ceases to employ its sponsored workers at settlement notifies the Department within 28 days of the cessation for each worker, and of the change in its business, and remains bound by the obligations that survive, the records, the cooperation with monitoring, and the return travel costs for a worker who requests them within the period because they are not transferring; a seller's sponsorship continues to its expiry as an approval with no workers under it unless the seller surrenders it. A seller whose contract requires it to assist the buyer with the transfer provides the employment records, the references and the nomination documents the buyer's nominations need, and a seller that sold without telling the buyer about the sponsored workers' status has a warranty problem in the contract. The seller does not withdraw the nominations until the buyer's are approved, where the Department's practice allows the overlap, because a withdrawn nomination ends the worker's basis before the new one exists.

The 186 nominations and the two years

A 186 nomination lodged by the seller for a worker and not decided at settlement lapses, because the seller no longer employs the worker in the position, and the buyer lodges its own 186 nomination when it can; the worker's 186 visa application is withdrawn for the refund and re-lodged against the buyer's nomination. For the transition stream, the amendments that commenced on 7 December 2024 removed the requirement that the two years of sponsored work be with the nominating employer, so that the worker's months with the seller count toward the two years provided the occupation is the same and they fall in the three-year window, and the buyer nominates when the total is reached; before December 2024 a sale reset the clock, which was the cruelty this guide used to have to explain. A 186 already granted is unaffected by the sale, since it is permanent and has no condition tying the holder to the employer. The previous-sponsor guide covers the count.

The unplanned sale

A sale that settled without the sponsorship being addressed has the workers in breach from settlement, and the exposure grows with the time: the buyer applies for sponsorship and lodges the nominations at once, the seller notifies, and the nominations explain in a covering submission what happened, when, and that the workers continued in the same roles at the same pay throughout. The Department's practice is to allow a new entity a period after a change of business to regularise the sponsored workers where the change was notified and the nominations followed promptly, and to treat an unexplained gap of months as a breach by the workers, who are the ones whose visas are at risk, and as adverse information for the seller that did not notify and the buyer that employed without sponsorship; the sooner it is done the better the reading. A buyer who discovers sponsored workers after settlement that the seller did not disclose has the same task and a claim against the seller.

The sequence that keeps the workers

1. At heads of agreement: identify every sponsored worker, every pending nomination and application, and the deal structure; decide whether a share sale is possible, since it is the simplest.
2. For an asset sale or a restructure: the buyer or new entity applies for standard business sponsorship at once, with the sale documents as evidence of the business it will operate.
3. Begin labour market testing for each position where no exemption applies, so that the advertising period ends before the nominations must be lodged.
4. Lodge the buyer's nominations, with the levy, timed to be lodged before settlement and approved where the Department's times allow.
5. Draft the sale contract with warranties on the sponsorship's standing, the workers' pay and the seller's cooperation, and with settlement conditional on or timed to the nominations.
6. At settlement: transfer the employees under the Fair Work rules with their entitlements; the seller notifies the Department within 28 days; the buyer notifies the change.
7. After approval of the buyer's nominations: the workers are lawfully employed by their sponsor; the seller withdraws its nominations where appropriate; the 186 counts continue.

A deal that follows the sequence has no worker in breach on any day, and a deal that does not has the Department's allowance and the consultation's help. The insolvency guide covers the business that ends rather than changes hands.

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General information only, current at October 2026; not advice on your own case, and not corporate, tax or employment law advice. The standard business sponsorship criteria in Division 2.13, the nomination criteria in regulation 2.72 including the associated entity provisions, the sponsorship obligations in Division 2.19 including the obligation to notify changes, condition 8607, and the subclass 186 Temporary Residence Transition stream criteria as amended from 7 December 2024, in the Migration Regulations 1994, and the transfer of business provisions of the Fair Work Act 2009, as in force at the date above; the Department’s practice on the period allowed after a change of business is a matter of its policy and the current position governs. Outcomes depend on the Department’s assessment of each application; no registered migration agent can guarantee a result (Code of Conduct, Migration Agents Regulations). Keshab Chapagain, MARN 1576536.