The Practice Buyer's Corner - Random Musings from the Buy-Side
The Practice Buyer's Corner - Random Musings from the Buy-Side
The purpose of this blog is to share current, real world, experiences on the topics of practice valuation, practice transition, retirement planning, and building equity value - over time - in your dental practice.
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seanepp
seanepp

Proposal? Letter of Intent (LOI)? Exclusivity?

9/30/2014 1:18:56 PM   |   Comments: 0   |   Views: 597
So, you're in the process of selling your practice? 

You may be receiving written offers with various titles - term sheet, proposal, Letter of Intent, etc.  Which of these documents are substantive and which terms are legally binding if you execute the document?  It is very easy to get confused.

We wouldn't recommend signing *anything* that is binding, particularly as it relates to confidentiality and/or exclusivity, if the document in front of you has any blanks or "TBDs" on the economic components - i.e. total purchase price, tax allocation, employment terms, and real estate terms (for lease or for purchase).

If you're being asked to sign a document that lacks one or more of these basic building blocks - be wary.  By executing it you could inadvertently lock yourself up for a period of time only to ultimately disagree over some fundamental economic terms that should customarily be agreed to prior to granting exclusivity.

Be safe out there!

Best,

Sean
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