Second contracts in practice complicate sales
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- Published: Tuesday, 11 September 2012 10:28
- Written by News Editor
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| Dental practices with a second GDS contract in the name of an associate can face problems if they try to sell, warns legal expert Ray Goodman. Many practices have a second contract. With no obligation for this to be held by the principal dentist it may be held by an associate. But a third party buying the practice would want both contracts transferred to them. |
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Questions as to who has the benefit of the second contract inevitably arise. The co-operation of the associate will be needed to transfer the contract on sale. The associate may transfer the second contract willingly as part of the principal’s goodwill, but they may not. Some will transfer only if the value of the goodwill in the second contract is paid to them.
The ideal solution is to address the issue before it becomes a problem, transferring the contract either into joint names, or preferably to the principal, by utilising partnership provisions in the GDS regulations.
Both principals and associates have interests to protect and these rely on a successful practice sale. Both parties must tread carefully to find a balanced outcome that is mutually satisfactory.
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