Dental Transition FAQs
At AGS Law, we specialize in helping dentists nationwide navigate the legal complexities of buying and selling dental practices. Below are some of the most frequently asked questions we receive about dental transitions:
1. What’s the difference between an asset sale and a stock sale when buying a dental practice?
In an asset sale, the buyer purchases specific assets (e.g., equipment, goodwill, patient records) and usually forms a new entity, such as an LLC, PLLC, or PC. This allows the buyer to avoid assuming the seller’s liabilities. In a stock sale, the buyer purchases ownership in the seller’s existing business entity (usually a professional corporation or S-Corporation), taking over both assets and liabilities. Most dental transitions are structured as asset sales for liability protection and tax advantages. However, many – but not all – partnership buy-ins are structured as stock sales.
2. How long does a typical dental transition take?
From initial offer to closing, a standard transition takes about 45 to 120 days. This can vary depending on due diligence, financing, whether the buyer is leasing or purchasing the commercial real estate, and state licensing or credentialing timelines. We help expedite this process by managing legal milestones efficiently.
3. What does a dental transition attorney do for me?
A dental transition attorney has experience with dental transitions and works to protect your legal and financial interests throughout the purchase or sale of a dental practice. In additional to drafting and reviewing all transition documents, we help form your business entity, negotiate deal terms, ensure the deal is fully compliant with your lender requirements, spot hidden risks, coordinate with your CPA, consultant, broker, closing officer, and insurance providers to keep the deal on track, ensure compliance with state laws, HIPAA, and other regulations, and help keep your deal on track to closing.
4. Do I need a letter of intent (LOI), and is it binding?
Yes, we recommend starting with an LOI to outline key business terms like the purchase price, timeline, and structure of the transition. While most LOIs are non-binding, they signal serious intent and set expectations. Some provisions—like exclusivity or confidentiality—may be legally enforceable, so legal review is important.
5. How are staff matters handled when a dental practice is sold?
Unless otherwise agreed, employees do not automatically transfer to the new owner. The buyer must decide whether to offer employment or new contracts, as applicable. We advise addressing staff retention and communication strategies in the asset purchase agreement and the transition plan with the other party to minimize disruption. In most cases, the seller is responsible for all employee wages, benefits, and liabilities until closing with the buyer assuming responsibility for these costs and liabilities after closing if the buyer chooses to keep the staff.
6. Should I buy or lease the dental office building?
It depends on your long-term goals. Buying offers equity and control, while leasing may offer more flexibility. If leasing, we negotiate terms that protect you post-closing. If buying, we ensure title and zoning are clear and work with a real estate attorney or broker as needed.
7. Are restrictive covenants (noncompete and nonsolicitation agreements) enforceable against a seller of a dental practice?
Yes. In most states, restrictive covenants (like noncompetes and nonsolicitation provisions) are generally enforceable against a seller, especially when tied to the sale of a business. Courts are often more willing to uphold these provisions in a dental practice sale because the seller is being compensated for the goodwill of the doctor himself or the business. Restrictive covenants prevent the seller from opening a competing practice or taking patients or staff after the sale. They are standard in most transitions and must be reasonable in time and geographic scope. We draft them to reflect state-specific laws as necessary.
8. Do I still need a lawyer if I already have a broker?
Absolutely. While a broker may help with the dental practice valuation and finding a buyer, only a lawyer can protect your legal interests, draft enforceable contracts, and minimize post-closing liability. Brokers and lawyers serve complementary but distinct roles in a transition.
9. Can I offer seller financing as part of the deal?
Yes—seller financing (where the seller carries part of the purchase price through a promissory note) is common in dental transitions. It can help close deals faster or bridge financing gaps if a third party institution cannot cover the entire purchase price. However, it increases risk for the seller, so terms like the interest rate, amortization schedule, default remedies, and collateral must be carefully structured.
10. How do I protect myself from liability after selling my practice?
We include strong indemnification and release provisions in your contracts to shield you from future claims related to patients, staff, or business operations after closing. You should also ensure your malpractice insurance covers any “tail coverage” for work performed before the sale.
Whether you’re buying, selling, or planning a future dental transition, having the right legal guidance is essential. At AGS Law, we focus exclusively on dental and healthcare practice transitions, ensuring your interests are protected every step of the way. Our team has helped dentists nationwide navigate these complex deals with confidence, clarity, and compliance. If you have additional questions or need help with your next transition, call us at 801-477-6144 or contact us online to schedule a consultation with an experienced dental transition attorney.