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7 Legal Insights for Your LOI


Embarking on the journey of acquiring a dental practice? Exciting times! As you navigate this process, we're offering strategic tips to fortify your Letter of Intent (LOI) with a legal focus. We understand the significance of a well-crafted LOI, and we have some tips to help with this stage of the transition process:



Assets Included in the Purchase:

Set forth generally which assets are being purchased. In many transitions, all assets of the practice, supplies, furniture, fixtures, hardware, intellectual property, and goodwill are being purchased. However, in certain transitions, intellectual property or certain assets may be excluded. Additionally, you may want to decide at this point whether you plan on purchasing the accounts receivable of the practice or not. We can help you determine which assets are being transferred in your transition to ensure both parties’ expectations are clear from the LOI stage. 


Concise Purchase Terms:

Clearly articulate the purchase terms with precision. Break down the proposed purchase price, payment structure, and the allocation of the purchase price. 


Practical Timeline and Closing Date:

Define a realistic timeline for the acquisition process and propose a closing date. Highlight the importance of adhering to legal and operational timelines in a pragmatic tone.


Due Diligence:

Set forth a due diligence period giving you sufficient time to review all financial information of the practice, patient charts, and the practice premises. The seller should not hesitate to provide you all information necessary to perform a thorough due diligence investigation. You may be required to sign a separate nondisclosure agreement, or there may be binding NDA provisions in the LOI itself.


Post-Sale Seller Arrangement(s) and Legal Safeguards:

Propose a post-sale involvement plan while ensuring robust legal safeguards. Clearly outline obligations, indemnifications, and liabilities during the transitional phase. How involved will the seller be after closing? Is there expectation that the seller will be paid for any consulting or clinical work? How long will the post-closing arrangement be? We can help you determine how to propose these items in the LOI.


Nonbinding vs. Binding Provisions: 

Typically, most provisions in an LOI are not considered legally binding. However, there may be certain provisions that are legally binding, such as NDA requirements, earnest money requirements, the seller’s obligation to maintain his or her practice operations, and exclusive dealings provisions. We can help you understand which LOI provisions are or should be binding, if any.

   

Negotiation Strategies with Legal Insight:

Express a willingness to negotiate, incorporating legal insights to convey a commitment to fair and legally viable terms with a touch of friendliness. We're here to support you through the LOI negotiation process.



Your LOI should reflect your professional expectations with a friendly touch. We're excited to be part of your journey and contribute to the success of your dental practice acquisition.





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