We Help Medical Practices with Buy-Sell Agreements in the Bay Area
Do you own and operate a medical practice in California? If you share ownership rights with any other party, it is imperative that you have a well-drafted buy-sell agreement in place. It is important to hire a solutions-driven business lawyer with extensive experience advising medical practices. If you have any questions about buy-sell agreements, we can help. Contact us at our Fremont law office today to set up your confidential, no obligation initial consultation.
What is a Buy-Sell Agreement?
A buy-sell agreement (buyout agreement) can be a contract between co-owners of a business. Most often, the agreement lays out the procedure under which the shares of a departing owner will be distributed or sold if they decide to exit the business due to various reasons—such as death, disability, or retirement.
Why Buy-Sell Agreements Are So Important for Medical Practices in California
While many business owners can benefit from a buy-sell agreement, these types of contracts are especially vital for medical practices. California law mandates that a medical practice must be owned and operated by a licensed medical professional (Moscone-Knox Professional Corporation Act). If a physician partner suddenly departs, another licensed professional must own the business. The practice cannot be directly transferred to most other parties—such as a non-physician spouse. A well-drafted buy-sell agreement helps to ensure a proper transition plan is in place.
A Buy-Sell Agreement Should be Customized to Meet the Needs of a Medical Practice
Every medical practice has its unique dynamics, professional relationships, and future aspirations. As such, a generic, one-size-fits-all buy-sell agreement can lead to complications down the road. It is crucial that the agreement reflects the individual needs and circumstances of the medical practice. Especially taking into consideration the assets and liabilities of the practice. You will want to make sure that you address any unique issues related to your practice.
Key Elements of a Well Drafted Buy-Sell Agreement
Although every buy-sell agreement should be customized to meet the needs of the medical practice, there are some key issues that should always be considered and addressed. Here are some of the most important elements that you will find in a typical buy-sell agreement:
- Valuation: Parties should define how the practice will be valued—whether through a predetermined formula or by a specified third-party professional.
- Trigger: The contract should clearly state the situations (death, disability, retirement, etc.) that will activate the buy-sell provisions.
- Funding: A properly drafted agreement will explain how the buyout will be funded—whether through insurance, personal funds, or outside financing.
We Help Medical Practices Negotiate and Draft Buy-Sell Agreements
Buy-sell agreements for medical practices are complex contracts. It is imperative that you have the right agreement in place for your business. Our law firm negotiates, drafts, and reviews buy-sell contracts for medical practices in California. We will ensure that any contract that you sign properly protects your legal rights and financial interests.
Contact Our California Business Lawyer for Medical Practices
Lynnette Ariathurai is a business law attorney for medical practices who has extensive experience with buy-sell agreements. Contact us today for your confidential consultation. We help medical practices with the negotiation, drafting, and review of buy-sell agreements throughout the Bay Area.