When you’re considering buying a pharmacy, it’s important to begin working with a pharmacy accountant and advisor months before the purchase. To help you understand the steps to buying a pharmacy business, we’ve created this collection of videos and our pharmacy buyer’s side checklist.
If you have questions about the buying process, please contact us any time at (252) 482-7644 or email us at [email protected].
Pharmacy Purchase Options: Asset Purchase vs. Common Stock Purchase
When buying a pharmacy, you need to determine whether to make an asset purchase or common stock purchase. Learn about some of the considerations so you can determine which option is right for you.
https://www.sykes-cpa.com/pharmacy-purchase-options-asset-purchase-vs-common-stock-purchase/
Questions to Ask When Buying a Pharmacy
There is certain due diligence that needs to be done during the pharmacy transaction process. Prospective pharmacy buyers need more than tax returns and financial statements in order to make a purchase decision. Find out what questions you need to ask during your pharmacy purchase.
https://www.sykes-cpa.com/questions-to-ask-when-buying-a-pharmacy/
Pharmacy Buyer’s Checklist
Pre-Planning
❏ Understand how you will perform due diligence investigation procedures for any possible pharmacy purchase
❏ Consider asset purchase versus stock purchase and the characteristics of each.
❏ Be prepared to use a valuation professional.
❏ Develop a written business plan, including capitalization and financing requirements.
❏ Review existing employee benefit plans if purchasing stock.
❏ Determine liability insurance requirements.
❏ Explore seller-financing opportunities.
❏ Prepare compensation agreements, rental agreements, loan documents, etc.
Starting a new business including purchasing assets
❏ For asset purchases, determine the fair market value of the target’s assets and allocate the purchase price.
❏ For asset sales, determine that the buyer’s and seller’s Forms 8594 are consistently prepared.
❏ Obtain tax and employer identification numbers, business licenses, etc., if purchasing assets and starting a new business.
❏ Consider the appropriate type of legal entity to operate the acquired business.
❏ Prepare corporate documents, if starting a new entity and purchasing assets (corporate charter and bylaws, LLC operating agreement, etc.).
❏ For an asset purchase, set up the tax depreciation schedule using the information from the allocation of the sales price.
❏ Determine employee benefit plans to adopt if starting a new company and purchasing assets.
Purchasing stock
❏ Evaluate potential contingent and undisclosed liabilities inherent in a stock purchase.
❏ For stock deals, consider the impact of Internal Revenue Code Sections 382-384 rules on the buyer’s ability to use the target’s net operating losses, etc.
Additional considerations
❏ Install accounting and payroll system.
❏ For C corporations, determine capital structure and owner compensation to avoid the double taxation issue.
❏ Consider related party tax rules, if necessary.
❏ Plan methods for retaining key employees.
❏ Consider consulting or non-compete agreements for former owners and the advantages of each.
❏ Identify first year tax elections that should be made.
