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Volume 1 Issue 7
32
S
upporting
Y
our
P
ractice
Getting Your Practice in Top Condition
FOR A SMOOTHAND
PROFITABLE SALE
Buyers are becoming increasingly
sophisticated in evaluating practices,
according to the experts. They
discussed a number of potential
obstacles that could lead to
decreased value in buyers’minds, and
recommended that you start getting
your practice in top shape well in
advance of your intended sale date.
The Necessity of
Employee Contracts
Mariana Bracic (
➊
), a specialist in
employment law for the health care
sector, said that, “employment issues
have one of the most significant
impacts on the value of your business.”
She explained that a buyer could
potentially spend tens of thousands of
dollars, or more, to address a vendor’s
issues related to employment law.
The reason, Ms. Bracic said, is that a
number of different laws in Canada
cover employment issues and they
are often contradictory. According
to diverse provincial standards
legislation, the maximum settlement
that an employee is entitled to can be
as low as 8 weeks, while with common
law, the rule of thumb for termination
pay is one month for every year of
employment, up to a maximum of 24
months. For example, to terminate
an employee with over 20 years of
experience could be extremely costly
if there is no proper employment
contract in place.
Ms. Bracic emphasized that the
remedy is to have contracts that
reflect the provisions of the minimum
employment standards as legislated
by your province. She suggested that
you start this process at least 3 years
before your anticipated sale date to
give employees sufficient notice, and
then ask them to sign contracts. She
maintained that the vast majority are
pleased to do so in order to retain their
jobs.
Getting Your Lease in
Shape
David Rosenthal (
➋
), a senior lawyer
who advises dentists on purchases and
sales of dental practices, focused on
potential pitfalls in your building lease
that could make a practice unattractive
to prospective buyers. These include:
A Demolition Clause
– If a landlord
decides to demolish the plaza or
building, they can terminate your
lease and evict you with several
months’ notice.
A Relocation Clause
– The landlord
can require you to relocate your
practice to another (and potentially
less desirable) location within the
plaza or building.
CDSPI is committed to supporting
dentists in all phases of their careers.
As part of this commitment, CDSPI
recently convened a panel of experts to
provide advice to dentists in transition.
The Navigating Change forum, held
in Toronto, included discussions on how
to make your practice as attractive as
possible to potential buyers, and how to
invest your proceeds wisely for retirement.
The main thing I want you to come away with is
that you need to surround yourself with experts.