When you are practicing in the field of dentistry, it is imperative that a buy-and-sell agreement should be put in place, especially when working together with another dentist. This agreement will make it possible to immediately sell one's share of the business when one dies, retires, leaves, or becomes disabled. Before you sign the agreement, here are questions to ask dental brokers Columbus Ohio.
First, you have to ask if the said purchase will become option or required when the triggering event occurs. When it comes to death or disability, you will most likely want this purchase to be required. The only time when it is fine to have it as optional is when one partner decides to leave or retire from business.
Ask what the definition for permanent disability would be. The said condition must be clearly spelled out within the agreement. It is suggested that permanent disability should be referred to in the agreement as the condition where a person is already disabled for a year without any definite expectations on one's return to practice.
You need to ask what is the method for establishing the price for the buying and selling. This buy-out price is actually the most difficult clause that you will have to decide on. You have to consider whether this will be determined through appraisal or if there is a predetermined formula. You and your partner must both agree to this.
Ask what would happen when there are disputes over the shares or other major decisions regarding the practice. If possible, you might have to put a provision in the agreement regarding binding arbitration. This can be the mechanism on how to resolve disputes for major decisions. It can be less costly than going to court.
There are times when a partner might want to sell at least a partial interest of the share. As much as possible, there should be a restriction to whom a partner sells a part or all of his or her share. This is a restriction that should be put in place so that the remaining practitioner retains the right to decide who his or her future business partner will be.
You have to ask how all accounts receivables, vehicles, and liabilities are to be managed during the buy-out. There should be a specific stipulation regarding how these are handled so that there will be no confusion during the buy-out. The distribution of vehicles and other assets should also be cited in the agreement.
You have to ask more on the payout terms. You must have a definite understanding on what the payout terms are so that the transaction becomes easier for both the parties involved. It can be in installment payments or you can have an outside lender fund the buy-out. You can also use a collateral to guarantee the buy-out.
Ask if it is okay to have a restrictive covenant provision. There are terms in the restrictive covenant provision, especially regarding future interactions with the practice. The partner selling shares should be asked to sign this reasonable restrictive covenant. Your plans will be affected greatly by this covenant so think carefully before signing the said agreement.
First, you have to ask if the said purchase will become option or required when the triggering event occurs. When it comes to death or disability, you will most likely want this purchase to be required. The only time when it is fine to have it as optional is when one partner decides to leave or retire from business.
Ask what the definition for permanent disability would be. The said condition must be clearly spelled out within the agreement. It is suggested that permanent disability should be referred to in the agreement as the condition where a person is already disabled for a year without any definite expectations on one's return to practice.
You need to ask what is the method for establishing the price for the buying and selling. This buy-out price is actually the most difficult clause that you will have to decide on. You have to consider whether this will be determined through appraisal or if there is a predetermined formula. You and your partner must both agree to this.
Ask what would happen when there are disputes over the shares or other major decisions regarding the practice. If possible, you might have to put a provision in the agreement regarding binding arbitration. This can be the mechanism on how to resolve disputes for major decisions. It can be less costly than going to court.
There are times when a partner might want to sell at least a partial interest of the share. As much as possible, there should be a restriction to whom a partner sells a part or all of his or her share. This is a restriction that should be put in place so that the remaining practitioner retains the right to decide who his or her future business partner will be.
You have to ask how all accounts receivables, vehicles, and liabilities are to be managed during the buy-out. There should be a specific stipulation regarding how these are handled so that there will be no confusion during the buy-out. The distribution of vehicles and other assets should also be cited in the agreement.
You have to ask more on the payout terms. You must have a definite understanding on what the payout terms are so that the transaction becomes easier for both the parties involved. It can be in installment payments or you can have an outside lender fund the buy-out. You can also use a collateral to guarantee the buy-out.
Ask if it is okay to have a restrictive covenant provision. There are terms in the restrictive covenant provision, especially regarding future interactions with the practice. The partner selling shares should be asked to sign this reasonable restrictive covenant. Your plans will be affected greatly by this covenant so think carefully before signing the said agreement.
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