Buying or Selling a Dental Practice and Equipment

Buying or Selling a Dental Practice and Equipment

By Keith Dunnagan and Matthew Kirkpatrick

Buying and selling a dental practice is not an uncommon occurrence for most practitioners. At some point in your career you will likely want to buy a practice after moving to a new city or to expand in your local market. Maybe you are at the end of your career and looking for an exit strategy? Similarly, it is not uncommon to sell all or some portion of your dental equipment. It could be that you are upgrading a single piece because there is more advanced equipment on the market, because you have fully depreciated the asset, or you are moving the entire practice to a brand new facility.

It is critical that you have the right team of professionals assembled to ensure your purchase or sale goes smoothly. Each side will need an accountant, a broker, and an attorney. The brokers locate or list the assets and act as the points of contact with the other side. The attorneys draft and review the various contracts encompassing the sale. Lastly, the accountant puts dollar figures on the different configurations of the arrangements.

We find that the best way to start a purchase or sale transaction is with a Letter of Intent. Essentially, it’s a short letter from one party to the other that has general guidelines of the agreement. It provides a quick way to put the buyer and seller in the same ballpark on the general terms of the agreement. The specific terms will need to be negotiated over, but the letter of intent is helpful in keeping the parties on track. Clear language that the letter of intent is meant to be non-binding should always be included. The letter of intent is supposed to only broadly define the parameters of the negotiation. You do not want to end up in a lawsuit to enforce the letter of intent if the negotiation breaks down over the details.

After the letter of intent the heavy lifting gets started. Your team will now need to negotiate over the details of the purchase and sale to fashion the terms of the letter of intent into an enforceable contract. There will be many phone calls and emails between your attorney and accountant to determine the specific terms as to the price, financing, collateral, and the dates for the sale that will be in your best interest. They will then

There are also many ancillary contracts that will accompany the purchase and sale agreement. If the seller is financing the sale a promissory notes and security instrument like a deed of trust (for real estate) or UCC filings (for everything else) will be needed. If the purchase is being done by a business entity you should also obtain a personal guaranty from the purchasing practitioner to further secure loan.

You may also want the selling practitioner to continue working at the practice to ensure a smooth transition. If so, you will need a consultation or employment contract to define the scope of that relationship. After the transition you will need to protect your new practice with an enforceable non-compete agreement to prevent the selling practitioner from opening a new practice and soliciting their former patients.

In addition to negotiations with the other half of the transaction, you will also need to involve the property’s landlord. It could add unnecessary stress to the transaction if the landlord’s consent is not obtained early on in the process. At the very least, give the landlord a heads-up to make sure there are no surprises.

There can be a lot to do to ensure that the sale of dental practice or equipment is done properly. An attorney familiar with the process and industry can make the process a lot easier and allow you to focus on your practice. This is even all the more true if you are selling an entire practice. In an upcoming series we will discuss the various aspects of tax law and how they should shape you’re the structure of the transaction and put more money in your pocket.

We hope that you will find this Article helpful in your business.  Please feel free to forward this Article on to anyone that you think may benefit from this information.  As always, if you have any questions or comments, or you need our assistance in your purchase or sale, you can contact us at or If you need a consultation for any legal issues, you can call our office at  (916) 966-2260 for an appointment at our Gold River headquarters or our Lincoln satellite office.  Consultations can also be done by phone.

This article is not intended to be legal advice, and should not be taken as legal advice.  Every case requires review of specific facts and history, and a formal agreement for service.  Please feel free to contact us if you need legal advice and are interested in seeing if we can help you.