Keys for Crafting a Transition Plan for Your Dental Practice

When dentists decide to retire or sell their practice, a transition plan is essential to ensure continuity of care for patients. For a smooth and straightforward transition, here are some key considerations to keep in mind.

1. Start Early

   Begin planning at least 3-5 years in advance. A typical succession plan for a dentist involves selling their practice to extract their capital. That being said, before you market the practice for sale, you will need to determine (amongst other things) the deal structure, the purchase price and whether you would be willing to stay on post-closing as an associate. Your team of advisors (read more below) can help you review your options.

2. Gather Your Team

   Selling a practice is a complex process and you will need to put together a team of lawyers and accountants to help you navigate it. Your lawyers will help you with contracts and understanding their legal implications, while accountants will help you understand the financial and tax implications arising from those contracts. If you need help valuating and marketing your practice, you can bring a dental broker onto your team.

3. Gather Your Documents

   As part of a practice sale, you will need to gather copies of all of your contracts as a prospective buyer will likely requests these from you to review and evaluate. Contracts include lease agreements, equipment leases, staff agreements and general office contracts.

You will also need to ensure that patient records are up-to-date and transferred securely to the new owner to maintain compliance with Ontario’s Personal Health Information Protection Act (PHIPA). Note that it is your responsibility as the seller to ensure all of these records are transferred successfully. Refer to the RCDSO for more information.

Have more questions about crafting a transition plan? Contact the team at Blackburn today for a free consultation.

* Please note that the information in this article is not intended as legal advice, but rather as a general overview on the subject. If you are seeking legal advice, please consult with a lawyer.