You may have read our previous post on Selling Your Healthcare Practice 101 to learn the basics of a seamless and successful business sale. Before closing the deal, it is crucial to create and finalize a sales agreement.
At Fenton Jurkowitz Law Group, we offer top-tier legal advice to assist you in the logistics of selling your practice to the right buyer. With help from a healthcare law lawyer, you can create an explicit and easy-to-understand agreement so both parties are on the same page.
Here are factors to consider as you create a sales agreement for your healthcare practice.
A sales agreement is a legal document that clearly outlines the agreed-upon terms and conditions to ensure a smooth transition of ownership. The purpose of the agreement is to ensure that both parties are aware of the rules and responsibilities of the transaction to make it as smooth of a transition as possible.
Identifying and understanding the buyer is the first step in drafting a sales agreement. Knowing their background and experience will help you tailor the agreement to align with the party acquiring your healthcare practice.
Below are other essential components of the agreement with which you should familiarize yourself.
Determine the sale price based on a thorough valuation of the practice. Clearly specify the total purchase price and outline the payment terms, including the amount, frequency, and method of payment.
Your buyer will want to know exactly what is included in the sale. This is where you will define the assets, such as equipment, furniture, and patient records. You should also determine any debts or liabilities associated with these assets, clarifying which will transfer to the buyer and which will remain the seller’s responsibility.
It is a smart idea to outline any conditions that must be met before the sale is completed. These conditions ensure that all necessary prerequisites are satisfied, providing security for both parties and allowing for a smoother transaction.
Essential conditions include obtaining the required licenses and regulatory approvals, securing financing, and ensuring that all outstanding debts and obligations are resolved.
This section of the sales agreement should clearly outline the roles and responsibilities of the employees who plan to work at the healthcare practice following the sale.
Define their job descriptions, reporting structures, and any changes in their responsibilities. Specify how much they will get paid, any potential benefits, non-compete agreements, severance packages, and more.
To finalize the agreement, you will need to obtain signatures of approval from both parties. This will signify that both the seller and the buyer understand the terms and conditions and agree to abide by them. The signatures serve as a binding commitment to uphold the agreement until all obligations are fulfilled and the sale is fully executed.
Fenton Jurkowitz Law Group has a team of seasoned healthcare lawyers who can draft and review a sales agreement if you are in the process of selling your healthcare practice. They can assist you with valuing the practice, finalizing the sale agreement, and executing the deal. Fill out our contact form on our website today to connect with a healthcare practice attorney.