Buying or selling a dental practice

Buying or selling a dental practice is complicated and can be a stressful experience, so you need the right advice to guide you through the process.

If you are buying

Once you find a potential target, you will need to carry out a thorough investigation into the practice, including its dental contracts, patients, staffing, premises, and other matters, such as potential claims or regulatory issues. Getting the proper legal advice is essential at this stage, before you commit to the purchase.

You should also involve an accountant, who can help you decide whether the price is right, and can consider the financial viability of the practice, the potential for growth, and the valuation of goodwill, uncompleted treatments, equipment and stock. If the sale includes a property, you will also need to consider a valuation. Indeed, if you are borrowing to fund the purchase, the bank or other lender will require this.

If you are selling

Do as much as you can to prepare your practice for sale before you put it on the market. In particular, start gathering the information which the buyer will want to see – such as accounts, practice leases, staffing expenses, PAYE records, rateable value, energy performance certificates, asbestos audits, X-ray test certificates, building regulations, staff inoculations, etc – and put it together as a pack which can be handed over to the buyer on request. This will save time and give the best impression of your practice.

Specific legal issues

  • GDS or PDS contract: In the case of an NHS practice, the transfer of the GDS or PDS contract is a key part of the process. We can advise you on the appropriate notices to be served on NHS England to help avoid objections to the transfer of the practice.
  • Purchase agreement: We can advise you on the agreement for the sale and purchase of the practice, whether you are selling or buying. The agreement will need to deal with all the aspects of the sale and must be drafted in a way that properly takes account of the operational and regulatory issues affecting dental practices.
  • Apportionments: The purchase agreement needs to deal with the apportionment between the buyer and seller of any uncompleted patient treatments.
  • Warranties and indemnities: The agreement will also contain warranties and indemnities to be given by the seller to the buyer. These are statements regarding the assets and liabilities of the practice, and we can help ensure that your position is adequately protected, whether you are selling or buying.
  • Restrictive covenants: We can advise on any restrictive covenants to protect the goodwill and prevent the seller from competing with the practice after the sale. These need to be carefully drafted, because they will be ineffective if they unreasonably prevent the seller from continuing to practice as a dentist elsewhere.
  • Employees and associates: The employees of the practice will automatically transfer to the buyer and we can advise on the obligations of the seller or buyer under TUPE. Associates do not automatically transfer, so we can help prepare documentation to ensure that the associates continue to work in the practice after the sale.
  • Premises: The transfer of the surgery premises is a key part of the process, especially because the price attributable to the premises themselves can often represent a large proportion of the total purchase price. We can investigate the seller’s title to the premises (if acting for the buyer) or assist with handling the buyer’s enquiries (if acting for the seller) and we can advise on any third party issues, such as landlord’s consent (if the property is leasehold) or planning issues.
  • Lending and finance: If you are borrowing to fund the purchase, we can advise you on your arrangements with the bank or other lender, including the loan agreement and security documents.

For more information on our experience in this area, or on the commercial legal services we offer to dentists generally, please contact:

Peter Coats
Partner and Head of M&A

T. 020 7227 7441
E. peter.coats@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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