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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 (

), 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 (

), 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.