Business Overdrafts
Be financially flexible with a business overdraft.
Read time : 4 mins Added: 23/02/2023
Buying a dental practice is complex and time consuming. However, as with most things in life, careful planning at the outset can save time and expense. We’ve asked experienced dental lawyer Stephen Knowles to explain some key preparatory steps that can help you get your acquisition off to the right start.
1. Take early advice from a team of experienced dental advisers including lawyers, accountants, property surveyors and lenders. Their early advice and assistance with the following issues will save time and expense:
2. Get to grips with NHS contracts transfers – Always try to establish as soon as possible what type of NHS contract the seller has. Most will be General Dental Services (GDS) contracts although some may be Personal Dental Services (PDS). Increasingly we are seeing practices with prototype contracts, so work out early what the seller has. Also check who precisely is named as a provider on the NHS contract. Sometimes a “sole trader” NHS seller has one or more partners on the contract.
If the NHS contract is held by a limited company, will the Local Area Team’s consent be required to change ownership? If so, it may require the seller to apply for permission for a change of control under the NHS contract up to three months prior to the completion date.
3. Consider the method of NHS contract transfer – If the seller has a GDS contract and trades as a sole trader or partnership then the incoming buyers will be added as partners to the NHS contract at completion. The sellers and buyers will remain in a CQC and NHS contract partnership for a short period post completion and then applications will be made to retire the sellers from these partnerships. If the buyers include people who are not registered dentists, checks should be made early on to make sure those people can legally be added to an NHS contract.
4. Prepare the CQC application – Are you fully aware of how CQC regulates dental practices and what documents will be required to ensure an application to the CQC is ready at the required time of completion? A useful starting point to consult is the Key lines of enquiry for healthcare services page on the CQC’s website (cqc.org.uk). There you will find downloadable resources to help assess how the CQC regulates against its 5 key questions of:
If you have not been registered with the CQC before, seek help from the seller (assuming their inspection history is good), to learn how the practice complies with CQC standards.
Taking all these steps will not guarantee a stress free and completely smooth purchase but following them should help you avoid the “icebergs” common in transactions. In addition, your expert team of dental specific advisers should be on hand to assist with the rest!
Stephen Knowles is a specialist dental specific lawyer at PFM Dental Legal, having more than 15 years’ experience assisting dentists with sales and purchases of practices. Stephen is the current Chair of the Association of Specialist Providers to Dentists.