Selling Your Practice? Get to Grips with Due Diligence

Have you built up a successful practice? Is it time to begin reaping the rewards of all your hard work? Having a thriving dental practice can be enormously satisfying, but people’s needs and aspirations begin to change as the years go by.Managing a successful practice can be tiring and stressful, and you might wish to free up more time, perhaps to get back into the clinical side of dentistry, or maybe you want to ease into retirement, to make the most of having had a successful career. Selling a dental practice can be a big decision, but ultimately it should feel quite liberating to think about planning the next stage of your life.

 

What is the Due Diligence Document?

The due diligence document is an important part of a dental practice sale. By raising various questions the Buyer and his lenders can fully assess the business from a financial, legal and compliance  perspective. Compiling a thorough and complete due diligence document will help reduce any delays in the transaction. When you put your dental practice up for sale, we recommend you begin to collect all the necessary documentation and information that is likely to be requested by the buyer.

Why is it Important for the Practice Owner to do Due Diligence?

It pays to get ahead as gathering everything together can take quite some time. Your buyer’s solicitor will assume you know everything about your business while at the same time their client will know nothing. Ensuring they have everything required will help to speed up the process and is likely to reduce the number of questions that will need to be answered before the dental practice purchase agreement can be drawn up.

Which Documents are Likely to be Required by the Buyer?

The list of documentations required is quite lengthy, but we can ensure you do not miss anything out as we have a list of everything you will need to have ready. Key documents likely to be requested include:

  • Practice accounts for at least three years

  • Staffing expenses and contracts of employment

  • Documentation related to the property including confirmation that a dental practice is permitted to use the property

  • Energy performance certificate and copies of any asbestos survey or report, as well as a Fire Risk Assessment and Legionella risk assessment

  • The practice CQC registration which includes the original application and all correspondence and certificates

  • A copy of the practice Health and Safety policy

  • Data protection registration

  • An inventory of all fixtures and fittings included in the sale, as well as a list of items not included in the purchase

  • A list of any equipment on lease agreement, including possible redemption statements

  • Copies of inspection certificates and maintenance contracts

  • Copies of all contracts with suppliers

  • A copy of any NHS contract related to the practice

  • Details of any breach notices

This list is by no means complete and we can give you far more detailed information when you contact us. As you can see, there is a lot to consider and our dental solicitors can advise you on which parts you can complete and which parts are best completed by your legal team

 

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