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ePaper created 2015-04-13, 15:09:21 | version 1.33.01
Dental Tribune United Kingdom Edition | 1/201512 ????????????? According to a recent survey by the Na- tional Association of Specialist Dental Ac- countants and Lawyers, private buyers and small groups in the UK have recently gained ground over large corporates in dental prac- ticesales.Particularlyforindividualslooking to buy or purchase a practice, however, the process can sometimes be overwhelming. A dental practice transaction can be done through an asset purchase (this gives the purchaser the opportunity to cherry-pick the assets) or a share sale (where the pur- chaser buys warts and all) if the seller has in- corporated his or her practice. This will de- pendonfactorssuchasthetaxadvantagesof either structure. Solicitors will provide assistance with ne- gotiating terms of the deal, including confi- dentiality and exclusivity. This can be with either the agents or the other party’s solici- tors. It is beneficial to have them involved at this stage so that all major terms can be agreed on, for example restrictive covenants. This also assists in the prepara- tion and negotiation of the sale agreement. The purchaser’s solicitor will make an in- formation request in respect of the business and make standard enquiries for commer- cial property. The seller’s solicitor will assist in the preparation of the responses to this. Thereplieswillthenbereviewedandanyfur- ther enquiries will be raised by the pur- chaser’ssolicitorasneedbe.Thisisanimpor- tantexercise,asitcanflushoutanymajoris- sues at an early stage and allows the pur- chaser’s solicitor to negotiate indemnities and/or warranty protection to be inserted intotheagreementoraretentionofthepur- chase price. The sale agreement can be the most pro- tracted stage of the negotiations. The seller will want to ensure that his or her post-com- pletion obligations and liability are mini- mal, while the purchaser will want to ensure coverage for anything that might go wrong with the practice post-completion. This will needtocoverclaw-backbyNHSEnglandand patientchargesandprovideindemnitiesfor contractual obligations and employees. The sale agreement will also deal with the mech- anisms for the transfer of the NHS contract via the partnership route and will differ de- pending on whether the seller is selling the assets or the shares. It is common now that a separate solicitor will also have to deal with the property ele- ments of the transaction. In the case of the purchaser, his or her solicitor will carry out searches against the property, review en- quiriesraisedandpreparethetransferdocu- ment. He or she will also then deal with the registration of title to the property at the Land Registry post-completion. Asolicitorwillalsoreviewtheplanningas- pects of the property and, where necessary, provide a statutory declaration that the property has been used as a dental practice for a specific amount of time, depending on the covenants attached to the property. The property aspects will depend very much on whether the property is leasehold or free- hold, and consents may need to be obtained from third parties, such as a landlord, to the transfer of the property to the purchaser. Inaddition,theremaybeothersinoccupa- tion of the practice premises, such as a hy- gienist, or part of the premises may be used as residential. In such cases, the purchaser’s solicitor will need to be satisfied that there are proper arrangements in place to deal with the occupation of third parties. The seller’ssolicitorwilldealwiththeremovalof any existing mortgage or security over the property. Throughout the transaction process, the purchaser’s solicitor will liaise with the fun- der of the transaction to ensure that its re- quirements are met. The funder will want to seethatthetitletotheassetsisappropriately transferred and that adequate security is given.Itisimportantthatthisdialoguebebe- gunatanearlystagetoensurethesmoothre- lease of funds at completion. The solicitors will also liaise with their re- spective client’s accountants and tax advis- ers to ensure that agreement on proposed apportionmentsismetandthatthereareno impediments to the transaction in this re- gard. The dental practice being sold will have a number of employees and this will vary basedonthesizeofthepractice.Inrelationto asset purchases, the Transfer of Undertak- ings Regulations will apply. The purchaser’s solicitor will want to carry out careful due diligence to ensure that he or she knows the terms on which the employees are con- tracted. The seller may wish to do a tidying exercise to ensure that contracts have been distributed to all employees and may re- quireassistanceinthisandwillrequireassis- tanceincompliancewiththeTransferofUn- dertakings Regulations and consultation with employees. Often, the solicitors will liaise with NHS England to ensure that the contract is cor- rectly transferred and to ensure that there are no issues arising that would affect the smooth transfer of the business from the seller to the purchaser. Where the seller is a limitedcompany,thecontractwillneedtobe checked for change of control provisions, wherebytheNHSwillneedtogiveconsentto any transfer to a third party. Furthermore, the solicitors will ensure that effective no- tices are given to the NHS, especially if the partnership route is required. There are a number of post-completion matters that will need be dealt with, such as registration of the transfer of the title with the Land Registry, payment of stamp duty where applicable and ensuring that the fun- der’s requirements are satisfied. The pur- chasermaywanttodoconsolidationoflegal matters, including employment policies and procedures, and register with the Infor- mation Commissioner’s Office for data pro- tection. Other fields in which a solicitor can provide advice are intellectual property/in- formation technology issues, branding, website issues or regulation. From time to time, disputes may arise post-completion, such as in relation to warranty claims, the NHS or other matters resulting from the transaction. A solicitor may also provide debt collec- tion assistance or, in conjunction with the purchaser’s accountant, guidance on the bestbusinessstructure,whetherthisisalim- ited company, a partnership or an expense- sharing partnership. He or she will prepare any documentation required to incorporate into a limited company and will provide a partnership agreement. Oneofthemostmeaningfulwaysinwhich alawyercanhelpinatransactionsuchasthis, however, is by offering general commercial sense and assistance. If a solicitor is experi- encedinthisindustry,heorshewillbeableto provide a much better service owing to an understandingofthenuancesandneedsofa dental practitioner embarking on the very daunting task of buying or selling a dental practice. BUSINESS Pathways for selling or purchasing a dental practice By Amanda Maskery,Newcastle Amanda Maskery Amanda Maskery is one of the UK’s leading dental lawyers. She is Chair of the Association of Specialist Providers to Den- tists (ASPD) in the UK and a Partner at Sintons law firm in Newcastle.Amanada can be contacted at manda.maskery@ sintons.co.uk © Andy Dean Photography / shutterstock.com DTUK0115_12_Maskery 09.04.15 15:24 Seite 12 DTUK0115_12_Maskery 09.04.1515:24 Seite 12