Buying or Selling a Dental Practice

dental lease agreement

dental lease agreement

Time to Buy or Sell a Dentistry Practice?

Are you a dentist that is just starting out your career or perhaps you have worked many years as a dentist in a successful practice and are considering retirement? You may be considering the purchase or sale of an established dental business.

Buying or selling a dental practice can be a time of excitement and anxiety. But when you work with experienced legal counsel, the process can be simplified while ensuring you’re protected legally and financially.

Whether you are considering purchasing a dental practice or planning to transition into retirement and sell your practice, consult with Michael E. B. Taing of Hummingbird Lawyers LLP.

As the managing lawyer for healthcare professionals, Michael’s practice focuses on advising healthcare professionals including dentists, physicians, optometrists, pharmacists and other regulated healthcare professionals with their corporate/commercial and real estate matters.

Buying a Clinic

“Before you decide to buy or sell, there are many things to consider,” says Michael. “Demand for existing dental practices for sale, especially ones with a prime location, are at an all-time high. A buyer today is not only competing against other dentists, but also against big corporations such as Dental Corp, one of the largest network of dental clinics in Canada.”

But before you start searching for the perfect practice, you need to do your due diligence.

“Equip yourself with a team of trustworthy and reliable professionals including your lawyer, tax accountant and financial advisors.  For example, your tax accountant can assist with reviewing the financial statements of the practice from the past three (3) years,” says Michael.

Typically for a buyer, you’ll want to buy the assets of the dental practice. However, a seller is likely to sell the shares of its existing corporation (which owns the dental clinic) to take advantage of the small business lifetime capital gains exemption, if available. Since it is a seller’s market, buyers will typically concede to the seller, but that may not always be the case. However the sale is structured, Michael advises, “you need to know the liabilities you’re assuming to avoid an expensive mistake down the road.”

Purchasing an existing dental practice via a share sale is not necessarily a bad thing, but buyers need to ensure to carry out their due diligence to avoid any surprises.

“The due diligence process will help purchasers assess the value of the business and assist them in making the right decisions and ultimately, securing the best deal,” says Michael.

As the buyer, you have plenty of questions and need answers. It is important to have your respective professional advisors examine the minute books of the corporation, financial statements, material contracts, existing lease, and other relevant documents.

Michael notes, “if you’re buying the assets, you’ll want the assets appraised and assessed for their value and search for any liens that may be registered against the assets.”

Selling a Clinic

Due diligence is just as important for the seller. You want to ensure the practice is in great shape before the buyer does their due diligence to avoid a lower price for your business.

“It’s important to review your books, contracts, financial statements and agreements to make sure they’re properly organized and complete,” explains Michael. “You should also have your business appraised to secure the best price for the sale of your practice. It’s important to know what your business is worth before commencing negotiations.”

Dental Lease Negotiation

The dental office lease is key to your success and that’s why it is important that its terms and clauses are reviewed by a professional to protect your investment. At Hummingbird Lawyers, we are here to protect your interests. We have experience in dental lease agreements and review services specific for dentists. We provide the guidance and expertise critical to the health and long-term security of your dental practice.

Our legal team will review your lease to identify potential problem areas and risks, and develop a lease improvement and negotiation strategy to help you achieve fair and equitable leasing terms that not only help protect your financial investment but also help prevent landlords from gaining an unfair advantage.

How Hummingbird Lawyers Can Help?

Whether you’re an experienced healthcare professional or starting your professional career, you need a lawyer who understands your needs and how to achieve your personal and professional goals.

We know your focus is on client care and growing your practice, not legal issues. Hummingbird Lawyers LLP is enthusiastic about developing and maintaining long-lasting relationships and providing you with a cost-effective suite of tailored legal services when you need them.

Speak to Hummingbird lawyer, Michael E.B. Taing, today before you make that next big step in your dental career.

Michael Taing

Michael is a Lawyer in the Corporate/Commercial and Real Estate practices at Hummingbird Lawyers LLP.

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