Obtain Counsel Early When Attempting to Sell Your Dental Practice

The sale or purchase of any business is a long, complicated process. This is especially so when it comes to a dental practice. Imagine, a group of busy dentists attempting to effectively compile, review, and complete stacks of documents while completing their normal, heavy workloads. Obtaining counsel early will minimize interference with your practice workload and provide a vital service to you throughout this difficult process.

When attempting to sale or purchase a dental practice it is essential to obtain counsel prior to the completion of the Letter of Intent, otherwise obstacles and backtracking are destined to occur. The Letter of Intent lays out the agreed upon purchase price, the mechanism for modifying the purchase price, the necessary confidentiality provisions to protect both employee and patient data, and the rights of all parties involved. A mistake during this process could cause one or both sides nightmares going forward. Hiring counsel prior to this point will ensure your rights and information are protected while the Buyer conducts its due diligence.

Upon completion of the Letter of Intent, the process gets even more intricate and time-consuming. The asset-purchase agreement includes all of this information and a whole lot more. Buyers want to know everything there is to know about the purchase they are about to make, including the details of every employee (rate of pay, paid time off, presence of non-competition  agreements, etc.), every vendor, every third-party payer, all the financials, accounts receivable and payable, frequency of rework, and the practice’s inventory or equipment, supplies and furniture. The asset-purchase agreement addresses each issue and lays out all of the representations and warranties that each party has to make at closing. The asset-purchase agreement must include all of this in order for the closing of the sale or purchase to be seamless.

Drafting, compiling, reviewing, and signing all of these documents is a difficult and time-consuming process that can distract you from making sure you effectively look after your own interests. Obtaining counsel early will allow your rights to be protected from the very beginning and help ensure that you are getting everything you reasonably desire from the sale or purchase. Not only will counsel “cross all your Ts and dot your Is,”  they will make the process a whole lot more pleasant for you.

By: Scott Cole, Esq. and Jordan Johnson