Buying or selling a veterinary practice generally is a long and arduous process.  Preparation and a good lawyer are key to smoothing the bumps along the way.  How well you plan determines whether you will control the process or vice versa.  Beyond identifying what is to be sold and the purchase price there are several planning issues that must be addressed.  For instance:

 

·        How will the sale price be taxed?  Tax planning may require transformation of the practice legal structure and long waiting periods to optimize tax on sale. Bear in mind that the buyer may not accept the structure you wish to use for the transaction (e.g., he may prefer to buy assets rather than an interest in the practice entity.)

 

·        Has an appraisal of the practice been performed?  To increase practice profitability and sales price, it may be worthwhile to get an appraisal.  Implementing the appraisal's recommendations may take several years.  From the buyer's perspective, a purchase without an appraisal may mean the practice does NOT have the cash flow to fund the purchase payments.  If the buyer defaults on the payments, seller may have to take back practice, long after retirement.

·        Are there any liabilities that should be taken care of before the sale (e.g., settle a claim)?  You also need to address any personal guarantees you have given to the business, and third party claims on any assets to be transferred (such as spouse and secured lenders).  If the practice entity owns the real estate, you may need to divest it (at what tax cost?) back to yourself or another entity you own because the buyer may be unable to afford to buy both. (click here to read entire article)