I and another physical therapist are planning to purchase an outpatient PT practice which has been in existence for over 25 years. We have both been working with the current owner at the same practice for over 10 years. We are already established in the community as well with the doctors and patients and would like to keep the name and TAX ID the same. I realize that there are liability/tax issues related to keeping the TAX ID, but changing it provides more issues.. as we have to start from scratch with insurances like medicare... who may not approve us for 90 days and we will have to renegotiate with physicians that are already CAPPED to us... who may choose not to sign with us... i'm trying to think of a fair way to minimize the liability for both the buyers and the seller. thanks!
You can definitely state that the Seller is responsible for any obligations prior to the closing date and the Buyers after, but if the Seller goes into Bankruptcy or is other wise judgment proof, you will have no recourse.You should definitely retain counsel to assist you and prepare the documents properly, run a lien search to see if there are any tax, judgment or other liens on the assets or the business.
My advice to anyone acquiring a business is to avoid buying the stock of a corporation or the membership interests of an LLC and to buy only the assets, thereby avoiding the unknown liability. When you buy the corporation or LLC you will be buying all the unknown liability, for example a lawsuit a year from now that was from injuries that occurred when your Seller owned the business.
I would be happy to speak with you about this further if you would like to give me a call at 215-525-1165 x101.
This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation.