Considerations When Buying a Veterinarian Practice
Are you considering purchasing a veterinary practice in California? Whether you are looking to take over that practice or you are interested in merging with an existing veterinary practice, it is crucial that you take a proactive approach. Lynnette Ariathurai is committed to providing solutions-focused business law services to veterinarians. Here, our Fremont business lawyer for veterinarians highlights considerations to keep in mind when buying a practice in California.
Know How to Structure the Purchase Agreement
One of the first considerations when buying a veterinary practice in California is determining how to structure the business. Broadly speaking, buyers and sellers have two main options available:
- Stock purchase: A stock sale involves buying the seller’s shares, resulting in the full and outright ownership of the entire business—including both its assets and liabilities.
- Asset purchase: An asset sale involves buying individual assets of the practice, such as equipment or client lists. It does involve buying the entire professional practice.
Put a Strong Emphasis on Due Diligence
Before purchasing a veterinarian practice in California, it is crucial that you conduct thorough due diligence. Due diligence is the comprehensive appraisal of a business undertaken by a prospective buyer to evaluate its assets, liabilities, and commercial potential. Some key issues that should be addressed during the due diligence process include:
- Location: An office lease for veterinarians is a very important issue. You should evaluate the practice’s location to determine its potential for growth and accessibility.
- Licensure: Veterinary practice is highly regulated. You should have a full understanding of the requirements of theCalifornia Veterinary Medicine Practice Act.
- Liabilities: You need to know what are the taxes owed, what existing contracts are in place, and any potential claims against the practice—from an employee or otherwise after closing.
- Equipment: What type of equipment comes with the practice? Be sure to inspect the condition and value of the equipment to ensure it meets modern veterinary standards.
- Employees: Human capital matters. Potential buyers should review employee contracts and qualifications to understand the team’s stability and expertise.
- Clients: Finally, you should assess the vet’s client base to gauge loyalty, satisfaction, and the potential for future business growth.
Prepare for Operating a Veterinary Practice
Acquiring a vet practice in California is a complicated endeavor. Setting yourself up for success goes beyond the purchase agreement and due diligence. Prospective vet practice owners should be ready to manage legal requirements, operational logistics, and client relations. Some key considerations to prepare for the operation of a veterinary practice include:
- The Transfer of an existing license in compliance with the California Veterinary Medicine Practice Act;
- The Transfer of key vendor, customer, leases and other contracts necessary to operate the practice;
- A decision on which employees to retain, including their compensation and benefits; and
- A timely notice to clients and their consent to transfer of pet medical records in compliance with all applicable laws and regulations in California.
By addressing these key areas and other legal matters, you will lay the groundwork for a strong transition. Proactively managing licensing, contracts, and personnel matters help to ensure operational continuity. Beyond that, clear communication with clients about changes can help you keep them satisfied with the business. An attorney can help you prepare for operations.
Get Help from Our California Business Attorney for Veterinary Practices Today
Lynnette Ariathurai is a business lawyer with extensive experience working with veterinarians. If you have any questions about the process for buying a veterinary practice, we are here to help. Call us now or contact us online to arrange your strictly confidential consultation. From our Fremont office, we provide business services to veterinary practices throughout the Bay Area.
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