Guest author: Julian Whitehead from Whitehead Legal
Buying a dental practice is a major milestone – but it comes with more than just excitement and opportunity. It also brings a host of legal considerations that can feel overwhelming if you don’t know what to look out for.
To help you navigate the due diligence process with confidence, here’s a 10-step legal checklist to guide you. Whether you’re still scoping out practices or getting ready to sign on the dotted line, these key areas will help you understand what you're really buying and how to protect yourself in the process:
1. Confirm the ownership structure
Start by verifying who legally owns the practice and its assets (goodwill, equipment, stock and intellectual property). Check all relevant documents – like the company constitution, trust deeds, partnership agreements and ASIC extracts – to confirm everything stacks up.
2. Review financial and tax compliance
You don’t want financial surprises after settlement. Request financial statements for the past 3–5 years, review tax returns and BAS statements, and check for debts, loans and any liabilities. Confirm employee superannuation is up-to-date and assess payroll tax obligations – especially how money flows through the business.
3. Check healthcare registrations and licensing
Make sure the practice complies with relevant dental regulations. Confirm that the business and its practitioners are registered with AHPRA, that all radiation equipment is appropriately licensed and that infection control policies align with ADA guidelines.
4. Understand the team setup
Ask to see all employment and contractor agreements and ensure they’re aligned with current awards (like the Health Professionals and Support Services Award). Check for any unresolved Fair Work disputes and consider whether the business relies heavily on a single key person to operate.
5. Review the property lease
Go over the lease to understand tenure, rent obligations, renewal options and who’s responsible for repairs and maintenance. You’ll also want to confirm the property is zoned for healthcare use – and that it supports the number of clinicians you plan to have on-site.
6. Protect patient data and privacy
Data compliance is critical. Review the practice’s privacy policies and how they handle patient records. Make sure files are transferable and that any past data breaches have been addressed. Confirm that all software licences are current and legitimate.
7. Review supplier and referral agreements
Understand the business’s commitments to suppliers, labs, or service providers. If there are referral arrangements with other healthcare providers, make sure they’re compliant. Don’t forget to look at equipment financing – some plant and equipment may be leased or under loan agreements.
8. Check insurance cover
Ensure the practice holds up-to-date policies for professional indemnity, public liability and workers’ compensation. Business interruption insurance is also worth checking. You’ll also want to understand what coverage will remain post-settlement and what needs to be transferred or renegotiated.
9. Investigate legal disputes
Request information on any ongoing or past litigation, including health and safety breaches. Ask about compliance notices from regulators or workplace incidents. These could be red flags – or at least help you negotiate a fairer price.
10. Assess value and goodwill
Work with your accountant to assess whether the price reflects the true value of the practice, including goodwill (like patient databases, branding, or reputation). Understand any clauses around non-compete or non-solicitation agreements that protect the business post-sale.
Due diligence isn’t just about ticking boxes – it’s about protecting your investment and your future as a practice owner. Taking the time to get this right sets you up for smoother ownership and fewer surprises.
A healthcare-specific legal expert – like Julian Whitehead from Whitehead Legal, a Grow Community partner – can help you avoid costly missteps and ensure everything is in order from a legal standpoint.
“Buying a practice isn’t just a transaction, it’s the start of a new professional chapter. Our job is to make sure you step into that confidently, with contracts, compliance and risk properly covered,” says Julian.
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