Tangible and intangible assets. Fair value must take into account the assessment of tangible and intangible assets. Our discussion on the evaluation of medical practices is here. The use of book value to determine fair value may underestimate the value of an investment by de-delicting the reduced costs of accumulated depreciation. While book value is useful in other contexts, it may not be suitable for buy-and-sell contracts. What will happen to your practice if you die, have a disability or retire? Unlike most companies, you can`t just pass the reins to a trusted family 3. The second most important mistake is that a buy-and-sell is not large enough to include all „Five D“: death, disability, divorce, departure and disqualification. Financial problems probably have positive and negative effects on the physician`s owner and the practice itself. Events requiring redemption, including how feed-in prices can be developed and paid for by group practices, as well as valuation issues and the resulting tax consequences, are important considerations. A partner`s disability is nine times more common than death before age 65. In addition, the disqualification of a partner because of arrest or detention, loss of licence or certification or challenge to an act that makes him an unacceptable partner is a problem.
The actions of a single partner that can destroy a business overnight are the recent allegations #metoo high-level and acts of discreet racism, shared on social media in immediate reaction to the crowd. Negative national exposure, which is viral, can make it impossible to prosecute this person and even, in some cases, uncertain for the practice. Each medical practice with multiple owners must have a capitalized sales contract to protect partners and their families from the death or departure of a partner. A „buy-back contract“ is simply defined as an agreement between all owners of a practice on how (or if) the transaction continues after the death or dementer of a partner and how, or if he or her family is compensated if such an event occurs. The death of a partner is the most obvious and often mentioned problem, but it is not the only problem facing partners and is not the most likely.