A healthcare practice buyer checklist covers whether the buyer holds the required regulatory college registration, how patient records transfer under privacy law, whether a seller’s non-compete against a regulated professional is enforceable, the billing and audit history, equipment calibration records, and malpractice tail coverage — the items specific to a clinical practice.
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This checklist covers what to verify before buying a Canadian healthcare practice — a medical, dental, veterinary or allied-health clinic. A healthcare practice is regulated in ways a typical small business is not, and several of these items depend on approvals from a professional regulatory college rather than on the deal itself, so they need to start earlier than a typical asset-purchase timeline allows.
Confirm the regulatory approvals a clinical purchase requires
Confirm the buyer, or the buyer’s designated professional, holds the required regulatory college registration in the province before signing a binding agreementA red flag is a deal structured on the assumption that registration will be a formality — some colleges take a meaningful review before approving a change of ownership or a new professional corporation.
Confirm the practice’s facility accreditation, where the specialty requires it, is current and understand what re-accreditation the change of ownership triggersA lapsed or conditional accreditation is a bigger problem for a healthcare practice than for most businesses, since it can limit what services the practice is even allowed to bill for.
Ask whether any regulated staff hold conditions, restrictions or open complaints on their licence with the professional collegeA staff member practising under a condition or restriction the seller has not disclosed can create liability and reputational exposure for the new owner almost immediately.
Review patient records, privacy and billing history
Confirm how patient records will transfer in compliance with privacy law and whether patient consent or notice is requiredPatient health information is subject to stricter handling rules than ordinary customer data, and a transfer plan that skips notice or consent requirements can expose the new owner to a privacy complaint.
Request a history of any billing audits, clawbacks or disputes with a provincial health plan or private insurerA pattern of billing discrepancies is a red flag a buyer can inherit as an audit target, even for billing activity that took place entirely before the sale.
Reconcile reported patient volume and average billing per visit against actual deposits over several periodsA practice’s value is tied closely to its active patient roster and billing pattern, and a gap between what is reported and what is deposited is worth investigating before relying on either figure.
Check equipment, staffing and non-compete enforceability
Confirm the leased premises are zoned and equipped for clinical use, including accessibility requirements for the specialtyA location that cannot support required accessibility standards or specialty infrastructure — plumbing for an X-ray suite, for example — can force a costly retrofit or a forced relocation shortly after taking over.
Confirm clinical and diagnostic equipment has current maintenance and calibration recordsEquipment that is out of calibration is not just a maintenance cost — using it can create a clinical liability the new owner did not know they were taking on.
Confirm hygienists, nurses, technicians and other regulated staff hold current certification and intend to remain after the saleA practice that depends heavily on one or two regulated staff members leaving with the departing owner can lose meaningful capacity the day ownership changes.
Review the seller’s proposed non-compete and confirm, with a lawyer, whether it is likely enforceable against a regulated professional in the provinceCourts scrutinize non-competes against regulated professionals more closely than an ordinary business non-compete, and an unenforceable clause means little protection against the seller opening down the street.
Check insurance and the goodwill structure
Confirm the seller carries, or has arranged, tail malpractice liability coverage for care provided before closingWithout tail coverage, a claim arising from treatment given before the sale can have no active policy behind it once the seller’s coverage lapses.
Ask how the deal allocates value between hard assets, patient list goodwill and any associate or locum agreementsHow this allocation is structured affects both the tax treatment and how much of the price actually depends on patients staying with the practice after the sale.
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.