Just another hurdle?
Dental transactions are unlike most other business transfers with a unique regulatory and contractual framework complicating the normal approach. It is common knowledge to those in the business of dealing with the sale and purchase of dental practices that there are one or two hurdles to jump, the most important of which is the effective transfer of the interest in a GDS contract.
It has been noted that in recent times dental transactions are taking longer to complete. This has been due to a combination of meeting bank criteria and a change to the normal process adopted for CQC applications, created by NHS England.
It is common, in advance of the sale and purchase of a dental practice which has the benefit of a GDS contract, for the parties to enter into a partnership in advance of completion. The effect is that the GDS contract will be left to reside with the incoming partner following completion of the sale, and resignation of the outgoing partner.
Previously, in “partnership route” transactions, where a 28 day partnership is used to transfer a dental contract, the parties would each have separate registrations with the CQC and the registration would be transferred at completion.
Since 1 April 2013, NHS England has established new criteria for the variation of a standard GDS contract to include new partners. This now means that any variation will not be processed unless there is a partnership registration with the CQC.
Consequently prior to completion of a sale, a CQC registration will need to be in place for the partnership (i.e. buyer and seller together) and further registration carried out by the purchaser post completion in order to ensure that the CQC registration is transferred into their sole name.
A further issue that has been identified is the need that this creates for selling principals to renew their advanced CRB checks as part of the partnership CQC registration – just another hurdle!
If the appropriate registrations are not made at the correct times this can cause significant delays (particularly given that an average CQC registration can take up to 8 weeks). This highlights the importance of using a dental specialist solicitor. Not only is it necessary for your solicitor to have a full understanding of the requirements of NHS England, they also need to ensure that any issues arising over the CQC registrations are properly dealt with. The Association of Specialist Providers to Dentists is an organisation which brings together specialist advisors across the country. In the event that you are looking to buy or sell a dental practice it is worth checking that your solicitor is a member of the ASPD prior to instructing them.
For more information on dental matters, contact leading healthcare lawyer Amanda Maskery.
Tel: 0191 226 7836