Instead of starting a medical practice from scratch, sometimes a physician wanting to start a new practice will look to buy an existing medical practice from a retiring physician who wishes to sell his practice. And of course, if a physician is seeking to retire from the practice of medicine, rather than simply closing the door of his medical practice and losing the monetary value of all of the goodwill he has built up in his medical practice over the years, he will want to locate a candidate and begin the process of due diligence on the prospective purchaser and the negotiation process for the sale of the practice.

Medical practice sales can be structured either as asset sales (i.e., the individual assets of the practice are sold, including the furniture, fixtures, equipment, and goodwill) or as equity sales of the underlying ownership interests in the medical practice entity (i.e., a stock sale in the case of a corporate entity or a membership interest sale in the case of an LLC). Both liability issues and tax issues arise based on the choice of asset sale vs. stock sale, so the parties to the transaction will want to carefully consider the structure of the purchase and sale. Other issues that arise on the sale of a practice include the transfer and custody of patient records, impact on employee benefit plans such as 401(k) plans, malpractice insurance coverage, notice to patients of the change, and restrictions on competition with respect to the retiring physician.

At DPS Legal Counsel, I can work with either the prospective purchaser of a medical practice or the selling physician to ensure that the purchase and sale transaction is handled appropriately and in the best interest of my client with fairness to the other physician in the transaction.