Asset purchase vs. stock purchase

An asset purchase buys the practice's specific assets (equipment, patient charts, the lease, goodwill) while leaving the seller's existing legal entity, and any liabilities attached to it, behind with the seller. A stock purchase instead buys the entire corporate entity itself, meaning the buyer inherits that entity's history, including any existing liabilities, unless they are specifically carved out in the purchase agreement. Most dental practice sales are structured as asset purchases for exactly this reason: it lets a buyer acquire the practice without also inheriting unknown legal or financial exposure from before the sale.

The choice also has real tax consequences for both sides, often pulling buyer and seller in opposite directions: a structure that is more tax-efficient for the seller can be less favorable for the buyer, and vice versa, which is a normal point of negotiation in almost every deal rather than a sign something is wrong.

This decision should be made with a dental-specific CPA and attorney involved early, ideally before the letter of intent is finalized, since restructuring the deal type after the fact is far more disruptive than settling it upfront.