It’s important to understand that an Associate Buy-In is a partial sale of your practice. Many of the components that are required of a full-practice sale are needed to ensure a successful and enduring Associate Buy-In partnership. Essential key elements include an appraisal, negotiation of the selling price, asset purchase agreements, a real estate contract (if applicable), a non-compete for all parties, and of course the financing of the practice for the buyer.
However, unlike a complete sale, an Associate Buy-In will require some of the following:
If a practice is incorporated, a stock sale does not allow the buyer the opportunity for depreciation. This results in the requirement to purchase the practice with post-taxed dollars, rather than pre-taxed dollars. This is one example of numerous intricacies our expertise will help with. Total Practice is the premier brokerage firm to conduct associate buy-in transactions.
When selling a portion of your practice in an Associate Buy-In, oftentimes it requires the restructuring of the operating entities. This process allows both seller and buyer the ability to finish the sale with the fewest tax consequences.
The final value of a practice based on an associate buy-in will differ from that of an outright sale in that the associate buy-in will normally assume practice liabilities with the seller.
In determining the value of a practice, it’s important to determine that a buyer has not overpaid, and a seller has received fair compensation. Total Practice Solutions Group can help you with this by:
The good news is that an Associate Buy-In is generally a win-win situation for the seller and buyer, but navigating the process can be tricky and time-consuming. Total Practice Solutions Group will work with your attorneys and accountants to develop a detailed plan on how to navigate the associate buy-in process.
Communication is key and the most important aspect of any associate buy-in. After all, both parties will be working side by side for many years, and a positive introduction to a new partner can determine the success of a new partnership and, thus, the practice itself. As previous practice owners, we have been on both sides of the table during our veterinary careers. We aim to resolve any issues that arise during the process so that you can enjoy a successful and enduring partnership.