Selling a dental practice

Selling a dental practice

Selling a business is a big decision; even more so with a dental practice because the dental industry has one of the more strict regulatory frameworks.

Luckily, Rubric Law specialise in the dentistry sector. In this article, we explain the general process of selling a dental practice, legal considerations, the documentation you will need to provide as a seller, and some of the legal jargon you may hear.

The process of selling a dental practice

The whole process of selling a dental practice includes a lot of people. Sellers will require support from financial experts as well as legal experts.

Generally, there are eight steps to get you from sale to completion.

  1. The dental practice will be valued through a specialist valuer
  2. An information pack will be produced
  3. The practice will be marketed through a specialist agent
  4. Due diligence queries from the buyer will be dealt with
  5. Buyer conditions will be submitted with the offer
  6. The sale and purchase agreement will be created
  7. Transition management, i.e. transfer of the GDS contract or PDS agreement together with Care Quality Commission registration transfer and TUPE transfer of employees
  8. Completion

Legal considerations when selling a dental practice

Having a legal team whose communication you can rely on is crucial; as well as using a firm with extensive experience in the dentistry sector.

From a legal perspective, there are five steps to the general process:

Step 1) Heads of Terms. During this step, an estimated completion date will be agreed by both parties. In most cases, heads of terms are non-binding in a legal sense so you can walk away from the transaction, although you may be liable for the legal costs of the other party.

Step 2) Due Diligence. The key to smooth due diligence is to make sure that there are no surprises for the buyer, they should be aware of where the business is at legally and financially.

Step 3) CPSE enquiries. This step only happens if the commercial property is owned, but it can cause the most delays in a sale. To reduce delays, consider pulling together all of the information (asbestos reports, fire risk assessments, health & safety reports, and energy certificates) early on in the process.

Step 4) Purchase agreement and supporting information. The purchase agreement includes all of the details of the sale and is the longest and most complicated document in the process. Warranties, and the disclosure letter, happen at this stage.

Agreeing on the purchase details can go back and forth several times between each side’s solicitors until completion of the sale. The ancillary documents, employment documents and TUPE documents will all be looked into at this stage too.

Property that is owned needs to be transferred dependent on the sale, or alternatively, landlords need to be contacted to change the information on the lease.

Legal charges and debentures will also need to be settled ahead of the sale completion.

Step 5) Completion. This is the busiest part of a sale but also marks the end of the road! During this period, usually a week, various documents will need signing, along with a completion statement, to outline the money that the seller will receive from the buyer (minus any costs from the transaction).

What information is needed from me to sell my dental practice?

  • Building regulations certificates
  • Asbestos audits
  • Energy performance certificates
  • Rateable value documentation
  • Financial statements
  • Employee expenses
  • PAYE records
  • Employee and associate contracts
  • Staff inoculations
  • X-ray test certificates
  • Lease information if applicable

How long does it take to sell a dental practice?

The time it takes to sell a dental practice varies from case to case. There are certain factors that can influence the timescale, such as a property purchase, or the time it takes to complete the due diligence forms.

Timeframes can all be discussed and estimated by your solicitor, but it’s good to be aware that it can take anything from 3 months to a year to complete.

Legal jargon explained

We could write a book with all the terms and phrases that you may hear a solicitor use during the sale of a practice, but here is a handful that you may find useful to know.

  • Purchase Agreement – the long document which outlines the terms under which the sale will take place.
  • Asset Purchase Agreement – the agreement when assets of a company are sold (think property, equipment, branding, etc). All or some assets can be included.
  • Share Purchase Agreement – the agreement when shares of a company are sold. All or a set number of shares can be included.
  • Heads of Terms – the broad terms of the transaction covering price, payment terms, property details, and continuing employment of the seller.
  • Due Diligence – the process of reviewing evidence that showcases and helps the buyer understand the state of the business.
  • Warranties – factual information about a business that the seller knows or believes to be true, to assure the buyer. This is like the warranty a manufacturer provides for new phones or cars.
  • Disclosure Letter – this document is used for the seller to outline any information which could impact the warranties, in order to avoid any liability if that warrant is breached.
  • Commercial Property Standard Enquiries (CPSE) – a detailed set of enquiries that help the buyer to understand all the information relating to the property.
  • Ancillary documents – these ensure compliance with the Companies Act and requirements of transferring legal ownership of shares.
  • Settlement Agreement – in buying or selling a business these refer to when the person selling is leaving the business as an employee and agrees to ‘settle’ things related to their employment. Usually, this is so they cannot bring an employment claim against the new buyer after the sale.
  • Transfer of Undertakings Protect of Employment Regulations (TUPE) – the legal requirement where employees have to be consulted within a reasonable time so that they can object to their contracts being transferred to a new owner.
  • Debentures – a type of debt.


If you’d like to discuss selling your dental practice in more depth please get in touch. Our experienced solicitors will be more than happy to help navigate you through the process.

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