Legal Considerations When Closing a Veterinarian Practice
Are you preparing to close a veterinarian practice in California? It is crucial that you take a proactive, detailed, focused approach. You need to comply with all state regulations and wind down your professional practice in an orderly manner so that you can best protect your financial interests. In this article, our Bay Area business lawyer for veterinary practices provides an overview of the legal considerations for closing this type of business.
Consideration #1: Regulatory Compliance
In California, there are regulatory requirements in place for winding down a business. Typically, the law requires business owners—including veterinary practice owners—to file the proper dissolution documents with the California Secretary of State for corporate practice and to notify all implicated parties, including clients, vendors, suppliers, and creditors.
Note: Proper disposal or transfer of controlled substances—in accordance with federal and state regulations—is also essential to prevent legal issues and ensure public safety.
Consideration #2: Employment Law
Veterinary practices should address labor and employment issues when closing their business, including plant closure laws. Try to keep your staff in the loop. Among other things, you will need to provide timely notice, handle the final paychecks and, potentially, manage employee benefits. Proper handling of employment law matters can help to prevent claims from employees.
Consideration #3: Client Communication and Client Records
A veterinary practice’s clients must be notified about the business closing. The California Veterinary Medicine Practice Act imposes certain communication/record requirements for professional practices that are winding down. Specifically, these duties include:
- Notification to clients: Veterinarians are required to notify clients in a timely manner about the practice’s closure. The notification allows your clients to make alternative arrangements for their animal’s care.
- Transfer of records: The veterinarian must ensure that patient records are appropriately transferred to another practitioner or returned to the client, as per the client’s wishes. Be sure that records are handled properly.
Consideration #4: Contractual Obligations
Does your veterinarian practice have any existing contractual obligations? Be sure to identify and resolve them. For example, seemingly simple things such as an office lease for a veterinary practice or SBA loan, must be proactively addressed. You do not want to face a breach of contract claim following the closure of your business.
Consideration #5: Finances and Taxes
When closing a veterinary practice in California, it is crucial to thoroughly manage all outstanding financial obligations, including settling debts with suppliers, creditors, and any service contracts to avoid legal complications. Beyond that, the practice must file final tax returns and, in doing so, declare the closure of the business.
After all debts and obligations have been paid, you can distribute the remaining assets among the owners of the veterinary practice in accordance with the ownership structure and/or operating/partnership agreements.
Set Up a Consultation with Our California Business Lawyer for Veterinary Practices
Lynnette Ariathurai is a top-tier business law attorney for veterinary practices. If you have any questions or concerns about the legal considerations when closing a veterinary practice, please do not hesitate to contact us for a completely confidential initial consultation. From our Fremont law office, we provide business services to veterinarian practices across the Bay Area.