DentaltownUK August 2017 - 52

Due Diligence: A Vendor's Perspective
A guide to selling your practice

by Luke Moore
Luke Moore, one of the
founders and directors
of Dental Elite, has
overseen more than
750 practice sales
and valuations. With
more than 11 years of
experience working in
the dental industry,
Moore has extensive
knowledge in dental
practice transfers
and recruitment,
and understands the
complexities of NHS
and private
practices. Contact:
dentalelite.co.uk, email
info@dentalelite.co.uk
or call 01788 545 900.

52

You've chosen to sell your dental practice, which
is a big step -but are you prepared for the potential
pitfalls you might encounter along the way? Indeed,
just like when you bought your business, there are a
number of major considerations you need to take into
account-including due diligence.
In case you've successfully managed to erase all
memories of due diligence since you purchased your
practice-and we wouldn't blame you if you had-the
process is a comprehensive appraisal undertaken by
a prospective buyer and their legal team to establish
a practice's assets, liabilities and risks to evaluate its
commercial potential. As a vendor, this means you will
have to prepare all the information that the buyer requires
about both your business and the property (or lease, if
you're selling just the business). As you can imagine, the
buyer will want to find out as much as they can about
the practice they're taking on-considerably more than
they did 15 years ago!-not only to confirm its suitability
but also to establish if there are any issues that need to
be rectified before the purchase is legalised.
During the due diligence procedure, also referred to
as 'precontract enquiries', an honest, open approach and
forthcoming attitude can help move the process along,
helping to reassure the buyer along the way. An attempt
to conceal key information, on the other hand, would
be detrimental to the sale-especially if the buyer were
to take legal action in the form of a breach of warranty
claim or claim of misrepresentation.
In any event, if you disclose the information to your
specialist dental solicitor in the first instance, they can
advise you on whether the fact needs to be disclosed.
So what does due diligence entail? As a vendor, you
are required to provide a number of key documents. In
regard to the property, you'll need to collate all of your
building regulation documentation, asbestos reports and
energy performance certificates, as well as proof that the
property can be used as a dental practice.
The buyer's legal team will also need all of your
regulatory inspection certificates, copies of policies
and procedures, and evidence of CQC and HTM
01-05 compliance. This will include proof of CQC
registration-including all correspondence, certificates
and original application-inspection reports and action

AUGUST 2017 // dentaltownuk.com

plans. If you have an NHS contract, your current and
previous UDA targets will be taken into consideration,
too, as will any employment contracts, share agreements
and partnership deeds (if applicable).
On top of this, you'll need to provide a detailed
inventory of all fixtures, fittings and equipment that
you plan to include in the sale of the practice, along
with a list of items (if any) that are being leased. All
test certificates and maintenance contracts will need to
be included, too.
Other than that, take the time to collect information
about staff vaccinations, GDC registration certificates,
details about PAYE and NI, and an up-to-date list of
patients and suppliers.
And because no stone is left unturned during due
diligence, you will need to provide three years' worth of
accounts to the buyer's legal team so that it can examine
the sustainability of the financial performance of your
practice.
On paper, it sounds moderately straightforward,
doesn't it? After all, what could possibly go wrong with a
little bit of filing? In my experience, the answer is 'a lot',
particularly if you're unprepared and uninformed. Looking
at the list of what's required, it's easy to underestimate
the amount of time it will take to collect everything
together, but unless you're extra-organised and everything
is where it should be, you might find yourself scrabbling
to find where you put it.
Worse still, if a document has been misplaced or is
out of date, you risk causing unnecessary delays while
you rectify the issue. If you can, then, allocate some
time before you market your practice to compile all of
your information-it could save you precious time later
on down the line.
It's also important to choose your solicitor or lawyer
carefully, because inexperience in the dental sector can
result in severe delays. For the best results, Dental Elite
recommends working with a specialist dental company.
With the right skills and practical knowledge of how
to approach due diligence efficiently and effectively, a
dental legal firm is your best chance of coming out the
other side successfully and stress-free in a timely manner.
Selling your dental practice is a huge milestone in your
professional career. Don't be foiled by due diligence! ■
http://dentalelite.co.uk http://www.dentaltownuk.com
Table of Contents for the Digital Edition of DentaltownUK August 2017
