What do you need to know about the Practice Sale Agreement?

If the practice were a proprietorship or partnership, then the purchaser would be buying the assets and goodwill of the practice. In Canada, it is important to know that if the buyer were purchasing an incorporated practice, then the sale should be structured so that he or she would be buying the seller's shares of the practice (which is an advantage to the seller as the tax implications are less).The purchaser and the seller have to be aware of the pros and cons of how the practice sale agreement is structured. It is always advantageous to seek professional help in these matters.

In fact, there are three methods to the valuation of a dental practice:

• The Market Approach
• The Asset Approach
• The Income Approach

The truth is that all three of these approaches contribute useful perspectives to value. Most of you are already familiar with the Market and Asset Approaches, with their Rules of Thumb, and commonly used by practice brokers and written about in the dental literature.

If not, then, we can discuss this further when you post your questions.