Dentists who are practicing on their own business with a partner should consider drafting a buy-sell agreement. Since there is a partner to the practice, this agreement settles everything when one or both partners die, leave, retire, or become disabled. You can ask dental brokers Columbus Ohio for help in this matter. To have a clear understanding of this, here are things to ask the broker about.
First, better ask if this purchase is optional or if this will become required during a triggering event. For death and disability, you will most possibly want the purchase to be required during a triggering event. The exception for this purchase which will make it option would be when the partner leaves or retires from this business.
Ask what the definition for permanent disability would be. The said condition must be clearly spelled out within the agreement. It is suggested that permanent disability should be referred to in the agreement as the condition where a person is already disabled for a year without any definite expectations on one's return to practice.
You need to ask what is the method for establishing the price for the buying and selling. This buy-out price is actually the most difficult clause that you will have to decide on. You have to consider whether this will be determined through appraisal or if there is a predetermined formula. You and your partner must both agree to this.
The partners might have some disputes in their practice, especially with regards to some major decisions. To prevent things from possibly escalating further, it is highly recommended to cite in the agreement to have a binding arbitration for it. This will become the mechanism for resolving the disputes cheaply than going to a court of law.
Ask regarding the instances for when the partners sell partial interests of their shares. Generally, you should put a restriction on who the partner sells the shares or even just a part of it to. The said restriction on that will give the remaining partner in the practice the chance to decide who will become his or her business partner after the sale.
Every business will have accounts receivables, debts, equipment, and vehicles. In the agreement, it should stipulate clearly how the practice's debts and accounts receivables are to be handled upon buy-out. For the equipment and vehicles, it should be clearly cited how they are to be distributed between the partners involved in the said practice.
Ask about the payout terms for the said buy-out as well. Be sure to have a clear understanding regarding the terms stipulated in the agreement so that the transaction proceeds smoothly. The payout might be funded via an outside lender or it might be in installment. One can even choose to put a collateral on the line for this.
Ask if it is okay to have a restrictive covenant provision. There are terms in the restrictive covenant provision, especially regarding future interactions with the practice. The partner selling shares should be asked to sign this reasonable restrictive covenant. Your plans will be affected greatly by this covenant so think carefully before signing the said agreement.
First, better ask if this purchase is optional or if this will become required during a triggering event. For death and disability, you will most possibly want the purchase to be required during a triggering event. The exception for this purchase which will make it option would be when the partner leaves or retires from this business.
Ask what the definition for permanent disability would be. The said condition must be clearly spelled out within the agreement. It is suggested that permanent disability should be referred to in the agreement as the condition where a person is already disabled for a year without any definite expectations on one's return to practice.
You need to ask what is the method for establishing the price for the buying and selling. This buy-out price is actually the most difficult clause that you will have to decide on. You have to consider whether this will be determined through appraisal or if there is a predetermined formula. You and your partner must both agree to this.
The partners might have some disputes in their practice, especially with regards to some major decisions. To prevent things from possibly escalating further, it is highly recommended to cite in the agreement to have a binding arbitration for it. This will become the mechanism for resolving the disputes cheaply than going to a court of law.
Ask regarding the instances for when the partners sell partial interests of their shares. Generally, you should put a restriction on who the partner sells the shares or even just a part of it to. The said restriction on that will give the remaining partner in the practice the chance to decide who will become his or her business partner after the sale.
Every business will have accounts receivables, debts, equipment, and vehicles. In the agreement, it should stipulate clearly how the practice's debts and accounts receivables are to be handled upon buy-out. For the equipment and vehicles, it should be clearly cited how they are to be distributed between the partners involved in the said practice.
Ask about the payout terms for the said buy-out as well. Be sure to have a clear understanding regarding the terms stipulated in the agreement so that the transaction proceeds smoothly. The payout might be funded via an outside lender or it might be in installment. One can even choose to put a collateral on the line for this.
Ask if it is okay to have a restrictive covenant provision. There are terms in the restrictive covenant provision, especially regarding future interactions with the practice. The partner selling shares should be asked to sign this reasonable restrictive covenant. Your plans will be affected greatly by this covenant so think carefully before signing the said agreement.
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