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Dental Practice Acquisitions
Dental practices are complex transactions that intersect multiple areas of law. Selling or buying a dental practice is not as straightforward as many think (including attorneys). These transitions often feature aspects not found in the sale of businesses in other industries. Surrounding yourself with the right mix of knowledge and experience can be critical for a successful practice transition.
Dental Practice Purchase Agreement
The Dental Practice (or Asset) Purchase Agreement is the guidebook to how a dental practice changes from one dentist's hands to another. Every aspect of the transition must be addressed thoroughly and clearly. A well-drafted dental practice purchase agreement should foresee all issues that may arise and plainly outline how to resolve those issues.
It should be noted that not all purchase agreements are equal. Agreement authors often borrow purchase agreements or provisions from other fields of law. While these purchase agreements are a good starting point, they are usually ill-fitted to address the unique considerations of a dental practice acquisition.
McGregor & Oblad PLLC starts with a comprehensive dental practice purchase agreement specifically originated to fit the needs of the dental practice acquisition. We start with this roadmap and shape it to comport to the unique needs of each individual dental practice acquisition.
Selling a Dental Practice
Selling a dental practice is often the culmination of years of preparation and is typically the climax of most dentists' career. Identifying the right selling vehicle is critical to an efficient dental practice sale.
Selling a practice carries significant tax, legal, and lifestyle implications. Most dentists are guided by the careful hands of experienced accountants, consultants, and attorneys. This helps to ensure that the practice transitions smoothly into the hands of a thoughtful and skilled purchaser, where legal liabilities are minimized and tax treatment is appropriate.
Buying a Dental Practice
Purchasing a dental practice requires at least as much attention to detail as selling a dental practice. In most circumstances, the purchaser is buying a dental practice for the first time. This requires immense preparation in the form of due diligence, tax planning, financial modeling, and negotiation by a team of trusted advisors to deliver the new practice in as good of a condition as possible.
Hurdles in Purchasing a Dental Practice
Many obstacles threaten to derail a potential dental acquisition. Similarly, there are also issues that frequently go unnoticed that could perhaps derail the transition. To avoid such issues, some questions to consider are:
- How is the practice price being formulated, and is it based on sound economic assumptions?
- What liabilities or potential future work is apparent on patient charts?
- Does the computer system accurately reflect what is being represented by seller's broker?
- Does the broker have a conflict of interest?
- How will the employees of the practice be acquired?
- What kind of redo work will you be responsible for?
- When is the underlying lease coming due?
- Is there a latent harassment, malpractice, or board claim you are buying unaware?
These are only a fraction of the questions that need to be asked by various team members when purchasing a dental practice. Unfortunately, some dentists do not take advantage of a qualified legal team when purchasing a practice in order to keep their acquisition costs low. While this may save them money in the short term, such decisions can actually jeopardize the assets being purchased, driving costs up in the long run.
We are dental law attorneys that bring a higher level of business expertise to the dental law community. We are skilled negotiators and skilled conversationalists, but we differ from other law attorneys because we understand the unique issues confronting dentists. With our qualifications as attorneys and our varied experiences with dentists, we can bridge the gap between these two very different areas to help dentists buy/sell their practices. At McGregor, we understand the niche world of dentistry, and we work with teams of other professionals that are intimately familiar with this area of law.