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Healthcare professionals wear two hats – the healthcare provider hat and the business hat. As a practicing healthcare professional, your primary responsibility is the health, care, and satisfaction of your patients. As a business owner, you want your practice to succeed and flourish, but you also are responsible for protecting your assets from circumstances such as malpractice lawsuits, business disputes, and employee claims.
For more than half a century, GSRM lawyers have represented healthcare professionals, such as physicians, dentists, surgeons, orthodontists, endodontists, psychiatrists, chiropractors, etc., individually throughout Tennessee in all types of practice-related matters, including those highlighted below. In today’s complex and increasingly litigious healthcare environment, GSRM works closely with healthcare professionals to structure, plan, and implement a business model which provides asset protection and operational efficiencies for your practice.
Practice Purchase Agreements
Whether you are acquiring or selling a practice, a well-drafted purchase agreement will help protect all parties involved by clearly identifying the rights and responsibilities between you and the other parties to the transaction. Healthcare is a sophisticated profession, and a carefully drafted purchase agreement that takes into account the informed wishes of the parties with respect to unforeseen events as well as underlying healthcare law, provides an essential basis for a successful purchase or sale of a practice.
Start-ups and Corporate Formation
When forming a healthcare practice, a multitude of important legal and tax issues must be addressed. You must determine what business entity structure best suits your needs (sole proprietorship, general partnership, professional limited liability company, professional corporation, etc.). In making this determination, it is crucial that you have a clear understanding of the potential risks and the liability issues associated with your practice. You also need to consider which entity formation will provide the best tax structure for your practice. Your practice will need to obtain a variety of permits, licenses, and registrations. If you intend to finance the startup of your new practice, you will be entering into contracts with banks, suppliers, and vendors. To make sure you and your practice are protected, your legal and tax advisors should carefully review these agreements before they are executed.
Entity Agreements for Healthcare Professionals
Communication is a basic foundation of every successful healthcare practice. A well-drafted, enforceable entity agreement promotes a clear understanding between the owners and sets forth a roadmap for resolving internal conflict. An entity agreement that defines owner responsibilities and clearly delineates authority should provide further operational efficiencies for your practice. A few critical issues an entity agreement might address include:
- Profit Sharing
- Voting and Management Rights
- Admittance of New Owners
- Disability or Death
- Competing Business Interests
- Buyout Rights
Your entity agreement may need to evolve with your practice. While entity agreements are not designed for frequent change, you and your attorney should periodically review your entity plan to make sure it still accurately reflects the desires of the owners. In addition, certain major events, such as the admittance of a new owner, disability, death, or the contemplated sale of your practice, many times call for changes and need prompt attention.
Associate Buy-ins
Owners and their associates have divergent interests with respect to the valuation of a healthcare practice and the future benefits to be received from a practice for purposes of an associate buy-in. Your attorney should address these challenges and work to structure and negotiate an associate buy-in agreement that aligns as much as possible the collective interests and objectives of all. It is important to address any potential concerns to avoid future conflict. Ease into the transition of an associate buy-in with industry-specific documentation that accounts for details such as tax responsibility and ownership rights.
Real Estate Acquisition/Sales/Leases
Whether you lease or own the space where your practice is located, the cost of your office constitutes a sizable financial commitment. Because of this, most healthcare professionals tend to concentrate their negotiations on price. However, because the cost to relocate a practice is so high, your negotiations should not overlook other risk factors specific to the healthcare profession. If you are acquiring a commercial property, thoroughly negotiating all terms of the purchase contract will help ensure the transaction goes smoothly. A carefully negotiated real estate purchase agreement or lease will help safeguard your new investment and protect the interests of you and your practice.
Owner Disputes
Dispute is an unfortunate, yet realistic part of any entity. In the event that you and your co-owners become involved in a dispute, effective dispute resolution seeks to encourage cooperation and joint decision making in order to break a deadlock in a manner that advances all owners’ interests. If a resolution involves an important management decision, such as the division of partnership assets, a carefully negotiated settlement will help ensure that your interests are protected.
Employee Disputes
Growth is an indicator that your practice is a success, and growth creates the need to hire additional employees, such as nurses and administrative staff. Well-drafted employee handbooks and policy manuals help protect your practice by setting forth clear guidelines for your employees and the legal obligations of the employer. Because every practice is different, employee handbooks and policy manuals should be tailored to your specific practice. If you are ever involved in an employment dispute, sound legal advice can help you strategically navigate federal and state laws with respect to employment-related matters, such as wrongful termination, severance disputes, non-competition covenants, and confidentiality issues.
Estate and Business Succession Planning
Effective estate and business succession planning ultimately rests on the effect your plan will have on you, your family, and any other intended beneficiaries. A plan that puts your affairs in order will give you confidence that you will be taken care of if you cannot care for yourself and that the people you love will be taken care of after you are gone. Estate plans can range from the simple, such as leaving everything to your spouse, to far more complex arrangements, such as using tax-savings trusts and gifting methods to protect and preserve wealth. By implementing an effective estate plan, you can help ensure those closest to you are provided for in your absence.
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