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A sale or purchase of a dentist practice will not only have the usual legal issues relating to a sale or purchase of a business but will also have its own unique issues including:
- Under which entity you wish to hold and run the practice
- If the practice has a PCT contract the practicality of having the contract transferred
- Dealing with Associate Agreements and transferring associates
- Dealing with employment issues
- If the practice is held under a lease dealing with the issues of consent from the landlord or if it is a squat dealing with any planning issues.
When purchasing with another dentist you should firstly consider the entity with which you will be running the practice:
- As partners (where liability, profit and expenses can be shared equally); or
- On an expense sharing agreement (where liability, profit and expenses are dealt with by a percentage ratio); or
- As an incorporated limited company.
We can advise you on the advantages and disadvantages of each of the above for you to make an informed decision and one that is right for your practice.
The PCT Contract
The decision as to how the practice is held and run by the purchasers may also be influenced by whether the practice holds a NHS Contract. If the practice holds a GDS (General Dental Service) Contract we would advise that the transfer of the goodwill is dealt by way of the partnership route, i.e. through a nominal shared partnership with the vendor. However if the practice holds a PDS (Personal Dental Service) Contract then the contract will not necessary transfer to the incoming purchaser in which case negotiations with the PCT will need to be conducted.
However, negotiations may sometime mean that the PCT take the opportunity to try and lower the value or number of the UDA’s/ UOA’s of the PCT Contract and we can assist you in opposing such application and offer practical advice on how to best approach the PCT for the most effective outcome for your practice.
Associate Agreements
As you may already know associate contracts do not automatically transfer on the purchase of a practice, to avoid losing valuable associates we can negotiate the terms of the new associate agreement prior to the purchase of the practice and ensure that the sale contract inserts conditions ensuring that the associate signs the new associate contract prior to the exchange of contracts and which can subsequently be put in place on completion of the transaction.
Other employment issues
Since 31st July 2008 all dental nurses must be registered with the General Dental Council (GDC) or enrolled on an accredited training course. To ensure that the TUPE regulations are followed and that all staff have written contracts and are registered with the relevant bodies we ensure that all due diligence checks are carried out prior to exchange of contracts and you are advised on the terms and conditions of the employment contracts on all staff currently within the practice.
Warranties
We negotiate and ensure that the sale contract includes warranties catered specifically for your practice on all matters including accounts, employees, property matters, equipment and intellectual property to name a few.
Property and Finance Issues
If you are buying a squat we can advise you on the terms of the freehold or if it is a new lease we can negotiate the terms of the new lease directly with the landlord as well as help with the planning application.
If you are taking on an existing lease we will advise you on the terms of the lease including: the rent review provisions, whether the lease has the right to renew at the end of term as well as the obligations for repair, redecoration and insurance. We will also deal and negotiate terms with the landlord to transfer the existing lease to you.
If you are acquiring the practice with finance we can act for the lender and deal with the lender’s security requirements to ensure that they are met and that the purchase completes smoothly and without delay. We can also put you in touch with specialist lenders dealing with healthcare transactions
For more information please contact Jenin directly:
Tel : 0207 467 5763
e-mail: j.khanam@rfblegal.co.uk |
