If the due diligence investigation following a buyer`s offer to purchase is successful, it is time to enter into the final – and very important – negotiations that precede the conclusion of the sales. Include the purchase price and how the buyer and seller agree to spread the price over the IRS fixed asset classes. In order to avoid a fall victim to the doctrine of de facto merger, a buyer should confirm that the asset sale contract has been carefully crafted to indicate precisely which sales commitments are being paid for by the purchaser and which sales commitments are not. A broad language where the buyer buys all the activities of the sales company increases the risk of this issue. In other words, there are reasons (at least in Texas) that a buyer should specify that he acquires all the assets of the selling business, so navigating this problem can be a challenge and is an area in which your legal counsel can create added value. One option you can choose is simply to include debtors as part of the purchase price. When you sell your practice, this is often the preferred option, as you don`t have to worry about collecting patients or insurance. One of the drawbacks is that the buyer will often be able to discount the amount of the receivables, as he will have to wait for payment and may not be able to recover the entire remaining balance owed. Similarly, the inclusion of receivables in the wealth acquisition contract can create undesirable tensions and possibly disputes between buyer and seller. Some payers may continue to pay the seller in the buyer`s place, resulting in disputes over closing payments. If the buyer is unable to recover the claims as intended, there may be fraud or misrepresentation against the seller. It is also possible that patients may be able to dispute a fee for the seller`s work, a topic that will be discussed in more detail in a future post on Work in Progress. The following diagram describes the content of the final agreement.
Note that this list contains only a framework and a general definition of the content of an agreement. Behind many elements are details that require advice from trained legal experts, which is why your broker and lawyer are important partners at this stage. The list of debts assumed by the buyer, often including debts; also contains a statement that the buyer does not support other than those listed. Another area of inheritance liability, which buyers should protect themselves against, is that of certain taxes. In California, for example, a buyer of a company`s fortune may be responsible for unpaid sales and use taxes, employment taxes and deductible taxes. While California is particularly aggressive on this issue, it`s not the only state that gets aggressive when it comes to finding someone who can pay its tax bills. In Illinois and Pennsylvania, for example, there are two statutes that, in certain circumstances, make asset buyers liable for sellers` income tax. These examples of government tax debt are the exception, not the rule, although they are on the alert.
One of the reasons (there are many others) that buyers prefer to buy the assets of the sale transaction rather than the shares or other holdings held by the owners is to prevent the acquisition of the company`s liabilities from selling. Most buyers prefer to pick up the company`s assets and leave the liabilities behind. A definition of the rules of procedure and dispute resolution for the management of late payments should not satisfy the terms of the contract, either by the buyer or by the seller. List of all assets included in the sale, including equipment, equipment, machinery, inventory, receivables, company name, customer lists, value and other items; also includes assets intended to be excluded from the sale, such as cash and cash accounts, real estate, automobiles, etc.