Buying or selling a dental practice can be much more complex than a standard business transaction. Alongside the usual legal and commercial considerations, the parties may need to navigate NHS contracts, CQC registration, staff and associate arrangements, premises, equipment and ongoing patient treatments.
Whether you are acquiring your first practice, expanding an existing business, retiring or moving on to a new opportunity, careful preparation is essential. This guide explains the key legal and practical considerations involved in buying or selling a dental practice in the UK.
“Had dental practice purchase completed with the help of solicitors Ben Ironmonger and Philip Salt and I am very pleased with their service, very professional, helpful, always responding and advising on matters quickly and completed the sale much earlier than anticipated. I would highly recommend them.”
Sateesh, Dental Practice Owner & Scott Bailey client
What makes buying or selling a dental practice different to other businesses?
A standard business sale agreement is rarely suitable for a dental practice transaction.
The legal and regulatory requirements will depend on how the practice operates, including whether it:
- Is owned by a sole practitioner, partnership or limited company
- Provides private or NHS treatment
- Holds a General Dental Services (GDS) or Personal Dental Services (PDS) contract
- Engages clinicians as employees or self-employed associates
CQC registration, NHS requirements and the structure of the practice can all also affect how the transaction needs to be handled. Taking advice from a solicitor with experience in dental practice sales helps ensure the transaction is structured in line with your objectives and avoids potentially costly mistakes.
Choosing the right transaction structure
Where the practice is operated as a limited company, one of the first decisions you will need to make is whether to structure your transaction as an asset sale or share sale.
In a share sale, the buyer acquires the company that owns the practice. The company remains the same legal entity, so its contracts will usually remain in place, subject to any change-of-control provisions, but so will its liabilities.
In an asset sale, the buyer acquires specific parts of the practice, such as its contracts, goodwill, equipment and premises arrangements. As the company itself is not transferred, contracts may need to be assigned or replaced and TUPE may apply to employees.
Particular care is required where the practice holds a General Dental Services (GDS) contract or Personal Dental Services (PDS) agreement, as each has specific requirements when a practice changes hands.
Both structures can have advantages for buyers and sellers. Our corporate and commercial solicitors can advise you on which best aligns with your objectives.
Where the target practice is operated as a sole trader or partnership, a buyer may choose to purchase the practice as a limited company. Caution must be exercised here as the NHS contract will need to be treated carefully to ensure it is passed to the buyer safely.
How to buy or sell a dental practice
Although every dental practice transaction is different, most follow a broadly similar process. The following steps provide an overview tailored to dental practice sales and purchases.
For a more detailed explanation of the wider process, please read our selling a business checklist.
1. Prepare for the transaction
Both parties should begin by clarifying what they want to achieve and taking steps to prepare for the transaction.
Buyers should consider the type of practice they want, whether it will be a full or partial acquisition, their budget and how the purchase will be funded. Where external finance is required, it is important to understand the lender’s requirements early, including whether additional security or personal guarantees may be needed.
Sellers should decide whether they want a full or partial exit, what price they hope to achieve and whether they intend to remain involved after completion. Before going to market, they should also ensure key financial, employment, CQC, NHS contract, property, equipment and patient records are in order and address any outstanding patient complaints or disputes.
Early preparation helps buyers assess whether an opportunity meets their objectives and allows sellers to identify issues that could affect the price they achieve or disrupt their sale.
2. Seek expert advice
When buying or selling a dental practice, getting the right advice can make all the difference. Alongside legal professionals, there are a range of specialist advisers that can support you with everything from finding a suitable buyer or practice and obtaining a valuation to resolving issues that may affect the price you can achieve.
A specialist dental practice broker can help sellers market their practice confidentially and identify prospective buyers, whilst helping buyers find practices that meet their objectives and budget.
Both parties should also obtain an independent valuation. Sellers need a realistic understanding of what their practice is worth, whilst buyers need confidence that the asking price reflects factors such as profitability, goodwill, equipment, location and NHS contracts.
Accountants and tax specialists can advise on the financial and tax implications, both for your business and you personally, helping ensure the transaction is structured in a tax-efficient way that aligns with your objectives.
3. Agree the key commercial terms
The parties will usually agree the main commercial terms first, often documenting them in Heads of Terms.
These typically cover the purchase price, payment arrangements, transaction structure, premises and any ongoing involvement by the seller. For dental practices, they may also address whether key associates will remain and any conditions relating to funding, CQC registration or NHS contracts.
In an asset sale, the parties should clearly identify which assets and liabilities are included, such as contracts, goodwill, equipment and responsibility for unfinished treatments or existing patient complaints.
Although Heads of Terms are not usually legally binding, they provide a clear framework for the transaction.
4. Carry out due diligence
Due diligence allows the buyer to raise enquiries about the practice, understand how it operates and identify issues that could affect the price or transaction.
For dental practices, enquiries will commonly cover financial records, employees and associates, property, equipment, complaints, patient record-keeping, data protection, CQC compliance, Units of Dental Activity (UDAs) and the performance of any NHS contract.
Sellers should provide clear, properly documented responses. This can help prevent delays and protect them from future claims relating to matters disclosed before completion.
5. Negotiate the legal documents
Having completed due diligence, now is the time to formalise the terms of the deal.
A share sale will usually require a Share Purchase Agreement, whilst an asset sale will require an Asset Purchase Agreement.
The documents may also address NHS contracts, CQC registration, employees and associates, unfinished or defective treatments, patient complaints, warranties, indemnities and restrictions on the seller after completion. Additional agreements may be needed, for example, if the seller will retain an interest or remain involved in the practice.
6. Exchange contracts and complete the transaction
Once the documents have been agreed and any outstanding conditions satisfied, the parties can complete the transaction.
Where there is a NHS contract involved, commercial borrowing or more complex property requirements, it is likely that there will be an exchange period, like on a residential property conveyance. However, where the practice is a private practice, it may be that separate exchange and completion are not required and the deal can be completed simultaneously (subject to CQC requirements all being in place).
At Scott Bailey, our dental practice solicitors have extensive experience guiding buyers and sellers through this process, from preparing your business or reviewing lender requirements to managing due diligence, negotiating sale agreements and handling completion arrangements. Leveraging their sector-specific expertise, our team can help you navigate your transaction effectively, avoid common pitfalls and achieve the best possible outcome.
Key considerations when buying or selling a dental practice
NHS contracts
NHS contracts can be the most valuable asset a dental practice owns, frequently being worth more than the premises itself. As a result, successfully dealing with these contracts is often fundamental to a transaction.
General Dental Services (GDS) contracts and Personal Dental Services (PDS) agreements have different requirements, which will also vary depending on the transaction structure and parties involved. Our dental sector solicitors have extensive experience helping buyers and sellers navigate these arrangements, including handling the required notices, approvals and contractual steps.
CQC registration and regulatory compliance
A change in ownership may require a new Care Quality Commission (CQC) registration or updates to an existing registration, depending on the transaction structure and how the practice operates.
As the registration process can affect the completion timetable, buyers should identify the required applications and notifications early, whilst sellers should ensure the practice’s registration and compliance records are in order.
Employees, associates and other clinicians
Dental practices often rely on a mixture of employees and self-employed associates. In a share sale, employee contracts will usually remain in place, whilst in an asset sale employees may transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Associates and other self-employed staff do not transfer automatically, so their agreements should be reviewed to establish whether key clinicians will remain after completion.
Our employment lawyers can advise on TUPE, consultation requirements and any associate or employment agreements that need to be transferred, replaced or updated as part of the transaction.
Property
The parties will need to establish whether the premises are owned or leased and whether they will be sold, transferred or retained by the seller. Where the practice operates from leased premises, the landlord’s consent may be required and the lease terms should be reviewed carefully.
At Scott Bailey, our commercial property solicitors regularly work alongside our Corporate and Commercial team to manage the sale, purchase or lease of practice premises as part of the wider business transaction, helping avoid unnecessary delays.
Equipment
The parties should clearly establish what equipment is included in the sale, whether it is owned, leased or subject to finance and whether any related agreements can be transferred.
Buyers should also review the condition, servicing history and likely replacement costs of key equipment, whilst sellers should ensure their equipment and maintenance records are in order.
Goodwill and patient relationships
A dental practice’s goodwill, including its reputation and patient base, can represent a significant part of its value. Buyers should consider whether patients are likely to remain after completion and how dependent the practice is on the seller or other key clinicians.
Sellers should maintain service standards throughout the transaction to avoid issues post completion, whilst both parties should agree any handover arrangements needed to support continuity and patient retention.
Ongoing treatments, complaints and liabilities
The parties should agree who will be responsible for ongoing or incomplete treatments and how the related income and costs will be divided.
The transaction documents should also allocate responsibility for defective treatments, patient complaints and claims relating to work carried out before or after completion.
Warranties, indemnities and disclosures
The seller will usually give warranties about the practice, covering matters such as its finances, contracts, employees and regulatory compliance. Any known issues should be clearly disclosed, helping protect the seller from future claims by showing that the buyer was made aware of them before completion.
Indemnities may also be used to compensate the buyer if a specific identified risk results in loss, such as ongoing complaints, tax liabilities or regulatory issues. Our dental sector solicitors support both buyers and sellers with negotiating appropriate protections, as well as helping sellers prepare clear, accurate disclosures.
Restrictive covenants and the seller’s future involvement
Restrictive covenants may prevent the seller from competing with the practice, soliciting patients or encouraging employees and associates to leave. These restrictions typically apply for an agreed period and within a defined geographical area.
Where the seller will remain involved after completion, the parties should clearly document the duration, responsibilities and terms of their role, together with any handover arrangements.
At Scott Bailey, we help clients negotiate restrictive covenants that protect the value of the practice for the buyer, whilst ensuring the terms do not unfairly restrict the seller’s future career or business plans.
How long does it take to buy or sell a dental practice?
There is usually a minimum time dental practice sales and purchases can take due to issues such as CQC registration for buyers (8-12 weeks for example). If this process goes smoothly, then a time frame of around 4 months is not unusual. However, landlords and NHS Local Area Teams (LATs) may slow things down with any additional requirements and so it pays for the parties to be as organised as possible from the start to try to speed things along.
How much does it cost to buy or sell a dental practice?
Legal fees for buying or selling a dental practice will usually range from £6,000 to £15,000 plus VAT and disbursements, depending on the complexity of the transaction.
The final cost will be influenced by factors such as whether the practice holds an NHS contract, whether the transaction is structured as an asset or share sale, whether property is included and whether the deal involves multiple sites or additional regulatory requirements.
Disbursements are costs paid to third parties as part of the transaction. These may include property searches, landlord’s fees for assigning a lease, indemnity insurance and bank charges. Stamp duty land tax may also be payable where property is involved.
At Scott Bailey, we offer a fixed-fee service and provide a clear breakdown of the likely disbursements and taxes, so you understand the expected cost of the transaction from the outset.
Do you need a solicitor to buy or sell a dental practice?
Whilst there is no legal requirement to instruct a solicitor when buying or selling a dental practice, doing so can help ensure the transaction is properly structured, documented and completed, whilst reducing unnecessary risk.
Buying or selling any business can be complicated, but dental practice transactions involve additional legal, commercial and regulatory considerations.
A solicitor with experience in both business transactions and the dental sector can help you navigate this complexity, protect your interests and ensure the transaction is structured in line with your objectives.
For most transactions, the cost of expert legal advice is relatively modest when compared to the potential consequences of issues emerging after completion, or the time and costs lost if a transaction falls through because of an avoidable problem.
Whether you need expert legal advice on buying a business or selling a business, our specialist dental practice solicitors are here to help you navigate the process effectively, protect your interests and achieve the best possible outcome. To learn more about how we can support you, get in touch today.
