Considering Buying or Selling your Practice?

Selling or buying a dental practice is a time consuming process with many seen and unseen pitfalls that need to be addressed through careful drafting of contract language and contingencies provisions.  Have you considered:

• The tax treatment of the purchase price to reduce future tax liabilities of both the buyer and seller.  For instance, in a sale of assets, allocating a larger percentage of the purchase price to intangibles such as personal goodwill and the covenant not-to-compete will reduce the seller’s tax liability.

• Employment of the seller and covenants not-to-compete need to be carefully negotiated.  For instance, if the seller is going to continue to work for the practice, how is he to be compensated?  Is the buyer/employer obligated to act in good faith in allocating  the workload?  If the seller is subject to a non-compete, is it fairly drawn and able to withstand judicial scrutiny.

• The collection of accounts receivable, write-offs and corrective work need to be addressed with either escrowing a portion of the purchase price, setoffs from collections or otherwise.

The careful handling of these issues, and many more, can determine the difference between a satisfying transaction and one filled with regret.

If you have questions about these or any other topics related to the dental profession, please do not hesitate to contact one of our attorneys.  We look forward to being of service.