A valuable medical practice has several key components, and whether the practice is being sold as an asset or an entity sale.
If employees are a key part of the success of the practice, their future will also play an important part of the sale of the practice.
When selling a practice, there are some basic options where employees are concerned:
If the buyer of the practice is interested in keeping some or all of the team intact, one way the seller can attempt to insure a seamless transition is to set up employment contracts with those employees in advance of the sale. The contracts would include:
If it is an entity sale, the any contracts that the existing corporation has will automatically be transferred over to the new owner unless specifically excluded as part of the agreement.
If it is an asset sale, the contracts themselves are assets and need to be specified as part of the assets being sold.
The sales contract should also obligate the buyer to keep to the letter of the contracts (wages, benefits, etc.) and indemnify the seller in case the employees later have some problem or decide to initiate litigation based on the way they were treated by the new owners.
Two final notes here:
Setting up contracts like these is something we specialize in and would be happy to help you with. Contact us to learn more.
The buyer of a medical practice may decide to bring in their own crew, or, if it is a particularly small practice, take over employee functions by themselves. In this case, the seller should let those employees know their fate well in advance. However, not before the buyer has signed a sales agreement and they and/or their new employee(s) been brought up to speed on the office processes and procedures.
A buyer may also opt to…
If the buyer is unsure, it may be best to leave the employees out of the sales contract, and simply have a wait-and-see attitude. The buyer can take over the practice, get to know the employees, and decide how and if s/he wants to proceed with the current setup or change it up a bit.
If this is how things will go, be sure as the seller that you do not have employment contracts set up that you will be violating (and thus inviting potential litigation from those employees).
There are as many different employment situations in a medical practice as there are practices being sold. As we’ve said above, sticky situations and legal questions may require the advice of a good attorney.
We have also been exposed to many medical practice sales that involve employees, and we’re more than happy to discuss them with you. Contact us now using the form below. We'll provide more information on your options and the best way to go about things in your particular situation.
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