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.
There should be a clear definition on what permanent disability means. You have to ask about the conditions that will qualify a partner as permanently disabled. Usually, the suggested condition would be that the partner is disabled for one year already. Also, there should be no more definite expectation for the partner's return to practice.
Ask regarding the method on how to establish the price for the buy and sell transaction. It is required to have a buy-out price and the buy-out price might just be the most difficult item in the agreement to decide on. Consider if the buy-out price is to be determined via appraisal or if you will follow a predetermined formula for it.
You need to ask beforehand for instances of dispute. It might be necessary for partners to have a provision regarding binding arbitration as a fair mechanism in resolving disputes among parties involved. With arbitration, you will be able to enjoy benefits such as it becoming less painful and less costly compared to 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.
Restrictive covenant provisions are common these days. In fact, it is highly recommended for partners to have a restrictive covenant provision in the agreement. The one who will be selling his or her share must affix his or her signature on this particular document. The restrictive covenant provision should finalize the buyout deal between the partners.
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.
There should be a clear definition on what permanent disability means. You have to ask about the conditions that will qualify a partner as permanently disabled. Usually, the suggested condition would be that the partner is disabled for one year already. Also, there should be no more definite expectation for the partner's return to practice.
Ask regarding the method on how to establish the price for the buy and sell transaction. It is required to have a buy-out price and the buy-out price might just be the most difficult item in the agreement to decide on. Consider if the buy-out price is to be determined via appraisal or if you will follow a predetermined formula for it.
You need to ask beforehand for instances of dispute. It might be necessary for partners to have a provision regarding binding arbitration as a fair mechanism in resolving disputes among parties involved. With arbitration, you will be able to enjoy benefits such as it becoming less painful and less costly compared to 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.
Restrictive covenant provisions are common these days. In fact, it is highly recommended for partners to have a restrictive covenant provision in the agreement. The one who will be selling his or her share must affix his or her signature on this particular document. The restrictive covenant provision should finalize the buyout deal between the partners.
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