Selling a pharmacy is a complex venture that requires several factors to be completed before a deal is officially made. It is best to enlist the aid of an attorney so the sale can move smoothly. A sale of this nature may require a significant amount of time to complete. You should build a solid negotiating team to gain favorable results for both sides. It is also important to know the legal issues that need to be taken care of when selling a pharmacy.
First and foremost, you should hire an attorney that has a proven track record in selling pharmacies. These professionals can provide the knowledge to resolve all issues and answer questions pertaining to the sale of your business. Also, it is important to hire an attorney that has good communication skills that can respond in a timely manner. If an attorney cannot commit to these conditions, it might be wise to move on to the next candidate.
It is important to understand that difference between purchasing the assets of the pharmacy and the shares of stock of the entity. Selling the assets will allow the seller to maintain its corporate entity and retain other assets that are not part of the deal. However, selling the stock will allow the buyer to maintain existing provider numbers, but it may also subject the buyer to liability for acts of the previous owner and management.
An asset sale defers certain taxes or corporate losses that will offset the income gained from the sale of the assets. Also, an asset deal will shield the new buyer from all liability related to the prior ownership of the pharmacy. This becomes important when it comes to unpaid taxes or vendor fees and who will pay them.
Once you and the buyer have verbally agreed on the basic terms of an agreement for the pharmacy, your attorney must begin drafting a letter of intent. This letter is a document that provides complete details on the transaction between the two sides.
The wording should clarify all assets that are included and excluded in the agreement, the purchasing price, and the approximate closing date of the transaction. The letter should also detail certain conditions that pertain to the business operations of the pharmacy once ownership changes hands. The letter of intent could contain confidential provisions that protect both sides’ interests in the agreement as well. Once this document is submitted to the other side for review, the next step in the process can begin.
From the other side’s perspective, their attorneys will begin a detailed review of the pharmacy after officially receiving the letter of intent from your attorney. This includes reviewing financial statements, operational costs, and existing contracts with all vendors. The information gathered from this extensive research will help to draft an agreement that reflects the official terms and agreements of the sale.
An asset purchase agreement document contains all the terms and conditions agreed upon in the deal. A detailed resolution in how the pharmacy will be operated by the new owners should also be included. The wording will include a description of the current working conditions of the pharmacy to date.
The asset purchase agreement will include a verified acknowledgement from both sides that no lawsuits are pending or expected in the near future. Attorneys from both sides will review each provision to ensure they are accurate and within the scope of the original agreement.
Your attorney will help to ensure that you understand and comply with all of the provisions agreed upon in the asset purchase agreement. In some states, sellers must file a Bulk Sales Certificate before any deal can be finalized.
The buyer’s attorney will perform a series of internet searches against the pharmacy to ensure all of the business practices are in order. Their biggest concern is confirming that there are no outstanding lawsuits pending against the pharmacy and its owners. Other small issues can easily be resolved during the negotiation process.
If your company needs the advice of an experienced lawyer, contact the legal team at Brown & Fortunato today. Our expert Finance and Corporate attorneys can help you prepare to sell your pharmacy and complete the transaction safely. Give us a call at (806) 345-6300 or Contact Us by email to learn more about our Practice Areas and how we can help you. You can also visit us in person at 905 S. Fillmore St., Suite 400, in Amarillo, Texas.
