It is essential that buyers have a robust practice purchase agreement in place when moving forward with a business acquisition. There are several reasons why this is so, including providing a buyer with fundamental legal safeguards and protecting the interests of the buyer during each stage of the acquisition process. When making a significant investment in one’s future, the value of having a comprehensive and solid practice purchase agreement cannot be understated. In fact, a strong purchase agreement can work to prioritize critical protections for a buyer.
The Critical Importance of a Solid Practice Purchase Agreement
Once a practice has been identified and a buyer is ready to make a purchase, having a practice purchase agreement will outline the sale of the business and its assets. It is the backbone of the buying and selling arrangement.
In a practice purchase agreement, the following considerations should be included:
- Identification of liabilities and determining which will be assumed by a buyer.
- The agreed-upon purchase price and the terms of payment.
- What tangible and intangible assets will be purchased.
- Assurances concerning the state and condition of the business and its assets.
- How losses due to breach of agreement will be handled.
- Clearly outline actions that must be taken prior to closing and ensure that the conditions for closing are achievable.
- Include post-closing adjustments for how to handle issues that may unexpectedly come about after closing.
- Having non-compete agreements that prevent sellers from engaging in business activities that would contradict the practice being purchased or add competition against it.
- Procedures related to arbitration or litigation should disputes arise.
- Contingency plans that allow the transaction to continue in the event of unexpected challenges.
The Value of Having Legal Assistance When Crafting a Purchase Agreement
It is possible to enter into the acquisition of a business alone and without legal guidance but there are many benefits to having legal counsel on your side when you are involved in such a significant transaction. Doing things right at the onset can be the difference between success with your investment and failure.
An attorney can provide expert guidance and advice on negotiations, structuring an agreement, and drafting one. Additionally, since due diligence is crucial, an attorney can ensure that a buyer knows their rights and responsibilities and any liabilities associated with the acquisition. Finally, since anything can happen during the acquisition process, it is possible for problematic issues to arise, such as compliance concerns with legal requirements. A lawyer can provide vital risk mitigation measures for a buyer.
Speak to an Attorney at Leiva Law Firm Today
Purchasing a dental practice can be an exciting endeavor, but there is an incredible amount of work and preparation that go into the process, including establishing a sound practice purchase agreement. With experienced and resourceful legal assistance, the complex process of a practice acquisition can go more smoothly, protect a buyer, and improve the success of the transaction.
If you would like assistance with a practice purchase agreement for a California dental practice, please call Leiva Law Firm today at (818) 519-4465 to schedule a free consultation with a Los Angeles practice purchase agreement lawyer.
