Buying and Selling a Dental Practice Solicitors
Buying or selling a dental practice is complex, so it’s important to seek legal advice from a specialist commercial lawyer with experience in dental practice sales and purchases.
Our corporate and commercial solicitors can advise buyers and sellers of dental practices across the UK from our offices in Bristol and the surrounding area in Bedminster, Bishopston, Bristol city centre, Kingswood and Thornbury. Our expertise in dental practice acquisitions is essential to avoid the various pitfalls connected with the transfer of a dental practice and to ensure a successful transaction.
Buying a dental practice
Whether this is your first purchase, or you already have a portfolio of dental practices, the prospect of purchasing a dental practice can be daunting. Our lawyers can advise you on the legal process of buying a dental practice, taking some of the stress away, and helping to ensure the transaction runs as smoothly as possible.
If you are buying a dental practice, the process is similar to buying any other business, however, there are dental-specific matters that you will need to ensure are dealt with correctly.
Stages of buying a dental practice
1. Due diligence
When considering a dental practice to buy, you will likely have seen some basic information about the practice, such as turnover and the number of staff. The due diligence stage involves more in-depth checks carried out by your solicitor. Some of the key areas of focus for the due diligence exercise include:
- The performance of the NHS contract if there is one;
- Equipment (details of maintenance of autoclaves etc. and an inventory will be needed);
- CQC (Care Quality Commission) registration and inspection reports;
- Insurance;
- Employment contracts;
- Associate agreements;
- Supplier contracts, e.g. clinical waste agreements;
- Leasing arrangements; and
- Whether there are any disputes or claims affecting the dental practice.
When you buy a dental practice, you are also buying the property which the practice occupies. It’s important that the correct due diligence is undertaken, and this will depend on whether the property is freehold or leasehold. If you are taking a leasehold, it’s important to check the length left on the lease as many lenders will require that you have at least seven years left to run.
2. Transferring the NHS Contract
If the practice has an NHS contract, a significant part of the transaction involves dealing with the transfer.
NHS contracts are not automatically transferred to new owners on sale. Transferring the NHS contract is complex and involves applying to the CQC. It is crucial to use a solicitor with specialist knowledge to help avoid the various minefields which make this far from a straightforward process.
If the practice has an NHS GDS (General Dental Services) contract, it is likely that you will need to use the ‘partnership route’ to transfer the contract as the contract itself doesn’t permit transfers. The buyer and seller will enter a partnership. After a period of time (usually two months), the seller will retire from the partnership leaving the NHS contract with the buyer. There are very specific timescales to be adhered to when dealing with the NHS partnership arrangements.
If the practice is incorporated, the NHS contract cannot be transferred by the ‘partnership route’ and permission will need to be sought from the NHS for the change of control.
3. Employment
Employment law is another important consideration. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) may apply to the employees of the practice. This ensures that staff members retain their existing rights and terms of employment when the business changes hands.
Buyers and sellers must comply with specific obligations, including informing and consulting with employees about the transfer.
4. Contract negotiation and completion
Our specialist commercial lawyers will review and advise on the Sale and Purchase Agreement (SPA).
The SPA sets out what you are purchasing and the legal rights and responsibilities of each party regarding the transfer of the dental practice and its assets. This agreement also includes provisions that are specific to dental sales and purchases (transfer of the NHS contract, CQC registration, unfinished or defective work, and underperformance, to name but a few), so it is important to ask a solicitor with experience in dental transactions to prepare this for you.
Buying a dental practice involves a variety of legal considerations. Understanding the legal landscape and the key stages of the transaction is crucial for ensuring that the acquisition is successful and compliant with regulations.
Selling a dental practice
Whether you are selling your dental practice because you are retiring, relocating or simply moving to new pastures, you should seek legal advice as soon as you’ve decided to sell. As the dental industry is regulated, there are several things you need to consider as part of the selling process, including the transfer of the NHS contract and CQC registration.
Our corporate and commercial solicitors will advise you on the legal steps involved in selling a dental practice, including:
- Agreeing on any Heads of Terms and confidentiality agreements;
- Advising you on due diligence and preparing formal replies to the buyer’s questions;
- Reviewing, negotiating and completing the SPA including the transfer of the goodwill and property; and
- Working with you and the buyer’s solicitors on the exchange and completion.
Our specialist lawyers can guide you through the process, working with other teams such as Commercial Property and Employment, where needed, who can advise on the property and employment-related elements of the sale.
Working with experienced legal advisers throughout the process will help ensure that the sale goes smoothly and that you are protected from any potential legal risks. By understanding the stages of the sale and the associated legal implications, you can ensure a successful and compliant transaction.
Top tips for preparing for sale
Selling a dental practice requires careful planning and preparation. Starting early will help ensure a smooth transition.
When selling your practice ensuring your paperwork is up to date and in order will make a huge difference to the progress of the transaction and will reduce the risk of delays, especially during the due diligence stage. It is also useful to digitise your practice records and documents (if they are not already in a digital format).
Dental practice sale and purchase FAQs
Selling a dental practice can take between six to 12 months, depending on factors such as the buyer’s financing, the transfer of NHS contracts, and the CQC registration process.
Heads of Terms are generally non-binding documents that outline the key aspects of the sale agreement, including price, assets, and key conditions. While not legally binding, it can provide a foundation for drafting the Sale and Purchase Agreement (SPA) and helps ensure that both parties are aligned on the main terms.
Preparing your practice involves ensuring your financial records are accurate, organising legal documents (leases, contracts etc.), CQC compliance, and reviewing employee records. Addressing any issues relating to the practice or premises before the sale can help avoid delays during the sale process.
Due diligence is the process of reviewing the dental practice’s financial, legal, and operational information. It involves examining financial records, employee contracts, regulatory compliance, equipment conditions, and legal obligations such as lease agreements. Thorough due diligence helps identify any potential risks or liabilities and if you are buying, ensures you fully understand what you are getting.
How to go about transferring the NHS contract will depend on the type of contract (is it a GDS or PDS contract?) and this will affect the associated timescales in dealing with the transfer. You may be able to use the partnership route to transfer a GDS contract. This needs to be done carefully to ensure that the proper notice is given to the NHS, adhering to their specific requirements and timelines.
For incorporated practices, the process involves notifying the NHS of a change in company control, which is more straightforward.
Further information
Buying or selling a dental practice involves a lot of decision-making and regulatory requirements to consider. No matter how experienced you are, the process can feel overwhelming; that’s why it’s important to have experienced corporate and commercial lawyers at your side.
For an initial chat, call our specialist team on 0117 325 2929 or fill out our online enquiry form.