Change of Ownership

The owners of a TAANZ travel agency business operated through a company can effect the sale of that business in two ways.

First by selling the business as such (but not the shares in the company which owns the business), or

secondly by selling the shares (or some of the shares) in the company that owns the business.

1. Sale and Purchase of the Business

The more usual method is the first. When this happens the purchaser will need to make new arrangements for bonding either through TAANZ or alternatively through IATA. Until those arrangements have been made the purchasers will not be able to carry on the business and act as a travel agent that ssues or arranges the sale of air transportation directly with carriers.

The vendor should make it clear to the purchaser that the purchaser will be unable to operate as a TAANZ bonded and IATA accredited agent until bonding and other membership requirements are satisfied.

The vendor should seek TAANZ approval for the change of ownership well before any proposed settlement date. In fact every sale and purchase agreement should stipulate that settlement shall not take place before TAANZ bonding and other requirements are met. If the purchaser wishes to apply for the IATA Accreditation of the agency, the vendor must contact IATA at the same time.

The Vendor is responsible for the BSP until the purchaser’s application for TAANZ membership/IATA membership has been approved and the purchaser has been issued with plates and has the capacity to issue tickets in its own right. Vendors of a business should not in any circumstances allow their IATA plates or ticket stocks to be used by the new owner prior to such approval. If the vendor does so then all transactions involving the same will be regarded as the transactions of the vendor, and the vendor will be accountable in respect of the same.

Consumer/airline funds held by a vendor should not be passed over to a purchaser until bonding and membership requirements have been met by the purchaser.

The purchaser will need to complete and lodge with TAANZ an application for full membership. This is required in every case including where the purchaser is already a TAANZ member.

Full Membership Application Form

2. Sale and Purchase of the Shares or Some of the Shares in a TAANZ Member Company

Where a change of ownership of a TAANZ member company is effected by the sale and purchase of shares in that company

a) Where there is a proposed change of ownership of 30% or more of the shares of a TAANZ member company the approval of TAANZ is required before such change of ownership is effected.

In such a case the purchaser must complete an application for approval of new shareholder form and pay the relevant fee.

It should be noted that: a vendor of shares in a TAANZ member company remains liable under any security or bond, which the vendor may have provided or arranged until that bond has been terminated. Vendor shareholders wishing to terminate their bonding obligations must give notice in writing to TAANZ or the TAANZ Bonding Authority. Termination is effective in relation to future transactions 30 days after the notice is received.

The vendor will still remain liable in relation to transactions entered into before the termination date for a 6 month “run-off” period. If a claim is received by TAANZ in the 6-month period following termination, and it relates to transactions prior to termination date then the vendors bond will be enforced to reimburse TAANZ for the costs of such claim. Vendors need to be aware therefore that any security provided to cover their bond will not be released prior to the expiry of the 6-month run-off period or settlement of any claim notified in that period.

Purchasers should familiarise themselves with TAANZ Bonding and other membership requirements. They should ensure that they do not enter into an unconditional purchase agreement of shares until they are satisfied that the company can and will continue to be able to fully meet TAANZ bonding and membership requirements after the purchase of the shares has been concluded. This will almost certainly involve the purchaser in providing security to support the TAANZ bond in place of the security previously supplied by the vendor of the shares.

If IATA or TAANZ becomes aware that a purchaser has not been granted TAANZ approval and/or is using the plates and/or ticketing mechanisms of a vendor, action will be taken to ensure the rules are complied with. Membership may be terminated.

Change of Shareholding Application Form

b) Where there is a proposed change of ownership of less than 30% of the shares of a TAANZ member company both the purchaser and the vendor of such shares shall notify TAANZ and the TAANZ Bonding Authority of such change and the date the same came into effect.