If you are considering taking down your shingle or are looking to grow an existing dental practice, it is crucial to plan ahead for such transitions. Ultimately, selling or buying a dental practice requires the advice and guidance of a lawyer who serves dental professionals.
Selling a Dental Practice
If you are nearing retirement, you can either sell your dental practice or enter into an associateship. Bringing on an associate will reduce your workload, ensure that your practice continues to provide patients with the quality care on which you’ve staked your reputation, and allow you to make a gradual transition into your new lifestyle.
If, on the other hand, you prefer an outright sale, it is wise to consult an attorney who is highly experienced in the dental space. Your attorney can help to negotiate the transaction terms and draw up the necessary legal documents. This includes:
- Letter of intent — This is a non-binding document that conveys your intent to sell, and the buyer’s intent to purchase the practice.
- Confidentiality agreement — Because the buyer will likely conduct a due diligence review by examining your patient and business records, a well-conceived confidentiality agreement will protect you, your patients, and your practice.
- Purchase agreement — This legally binding contract will clarify how your dental practice will transition to the buyer. Above all, the sales terms and the rights and obligations of both parties must be clearly expressed.
- Closing documents — Your attorney can also prepare closing documents and represent you at the closing.
Buying a Dental Practice
Buying a dental practice can be a rewarding experience, provided that you conduct thorough due diligence. Ultimately it takes a skilled attorney to assist with the due diligence process to verify that the targeted dental practice is in good financial condition, has strong income potential and has no unknown debts.
Your attorney can also help you negotiate the basic sale terms (e.g. sales price, allocation, financing), determine the structure of the transaction (e.g. membership, stock or asset sale), discuss a proper valuation, and prepare all the legal documents, including a non-compete agreement, which prohibits the seller from competing with your newly acquired practice and using patient lists or trade secrets to solicit former patients.
The Takeaway
Buying or selling a dental practice is a complicated endeavor that involves many aspects of law. The best way to protect your interests is to work with an attorney who is experienced in dental practice transitions.