How to sell a pharmacy? Guide.
[The article contains references to the current legal status - May 28, 2024]
A short introduction before we move on to strictly legal considerations:
our model of cooperation in the sale of pharmacies and the current business conditions of market transactions.
If you think it's time to sell your pharmacy, you're in the right place. This is ours for the owners of pharmacies and those who plan to join them Pharmaceutical Law Office has been providing comprehensive legal and business assistance throughout the country for years.
We help in preparing the pharmacy for sale, also by conducting a pharmacy valuation. Then we conduct the process of searching for buyers for it, using our proven contacts. The law firm's services also include preparing a safe contract for this rather complicated transaction. Typically, clients also leave it to us to finalize the terms of sale of the pharmacy with the other party through negotiations. We also often prepare applications for WIF and all related documentation.
More about our comprehensive pharmacy valuation and sales support services in the summary at the end of the article. Now to the point.
How to determine how much a pharmacy is worth? How much should you sell your pharmacy for?
Determining the selling price of the pharmacy is only one of several, but a key element of a successful transaction. We know from practice that security, for example, is equally important, both in terms of protection against loss of the pharmacy license and guaranteeing payment of the agreed price.
The basic way to value a pharmacy is to determine its value based on its turnover over the last 12 months. A monthly average is derived from this period and then multiplied by various coefficients. The fee for selling the pharmacy depends on several key issues - ownership of the premises, length of the lease agreement and its stability, margin of the pharmacy, debt of the pharmacy, value of its warehouse, development prospects, size and stability of the staff, and the situation on the local market.
If necessary, such a valuation is performed by specialized auditors (some of them constantly cooperate with our office), but you can, of course, also order a simplified valuation from us. Performing such a simplified valuation based on 9 key factors is quite a popular order, which we complete within 4 business days. You can even order this service from us by e-mail.
In the practice of trading in pharmacies, proposing an "off-the-shelf" price for the sale of a business does not really make much sense, which is why we always encourage our clients to order at least a simplified valuation variant. Such a document usually constitutes a solid basis for the seller's substantive preparation for sale. And this may translate into the final price obtained.
How much does it cost to buy a pharmacy? What is the price for the pharmacy? How much is the pharmacy fee?
As much as it is worth to the seller and the buyer - in practice, any amount is possible, but currently (2024) 95% transactions take place at a price (also called the consideration) ranging from PLN 100,000 to PLN 800,000. Of course, usually the more expensive the pharmacy, the higher the potential profits it can bring to buyers.
However, in practice, for a pharmacy to be profitable, several factors must come together. In turn, the price obtained in a pharmacy sale transaction is also influenced by negotiation skills, individual beliefs, needs and emotions. To sell a pharmacy well, you often need patience and perseverance.
Another important issue is to determine what exactly the assets of this company are.
To conclude: previous valuations and transaction amounts from several years ago are worth little because the market has changed significantly over the last year. Several factors influence the valuation of the pharmacy and its subsequent price. The general rule is that a business that is doing well sells better than one that is in trouble.
However, companies are not always sold on the market for reasonable amounts - both ways. However, the expectation that someone will pay a price "out of space" when buying a pharmacy is an expectation similar to the one we have when buying a lottery ticket. It is not overly rational and such a project has really little chance of success.
Is it possible to sell medicines to a pharmacy? I will sell a pharmacy, but only with medicines - how to settle accounts?
To answer the most frequently asked question: yes, you can sell a pharmacy with medicines. And you even have to, for many legal reasons.
It is worth emphasizing, however, that many buyers do not want to pay the same amount for all drugs available in the pharmacy. A particular problem here are medicines at the end of their expiry date and those with poor rotation, in which potential pharmacy buyers are often less interested, or not at all. This issue is usually the subject of long-term negotiations, so it should be taken into account when preparing the pharmacy for sale. A pharmacy is a pharmacy, but the value of the goods in the warehouse of the sold company and the level of its debt usually significantly affect the final price in such a transaction.
Therefore, these transactions are usually carried out in the following model: X(pharmacy value (e.g. from valuation or negotiation) + Y(warehouse value) – Z (value of debt in wholesalers) = actual price
So, in practice, in most transactions, the agreed price is increased by the value of the goods on the shelves on the days of sale and decreased by the value of the pharmacy's debt to pharmaceutical wholesalers.
We invite you to read the rest of the strictly legal part of our article. We cordially invite everyone interested in selling or buying a pharmacy to visit us contact. Regardless of whether you are planning to sell your pharmacy to a pharmacist, establish cooperation with a larger entity, or are simply looking for buyers for your business, we will be happy to support you. We operate throughout Poland and in each province we already have quite a large number of satisfied customers.
What is the sale of a pharmacy from a legal point of view?
Pharmacies are run in two basic forms, i.e. as sole proprietorships and as commercial companies. The sale of a pharmacy is essentially a sale of an enterprise or an organized part thereof if it is conducted as part of a business activity or is carried out by selling shares - in capital companies and the rights and obligations of partners - in partnerships.
The most important practical conclusion is that in preparation for the sale of a pharmacy, it is first necessary to confirm the legal form in which the enterprise operating the pharmacy is registered. This information determines what will actually be the subject of the sale, although it is often much more advantageous to sell a pharmacy by making appropriate changes to its legal form.
Legal conditions regarding the sale of pharmacies - after Apteka dla Aptekarz 2.0.
The sale and purchase of a pharmacy is a complex process because it combines both related issues stricto sensu with private law, i.e. the sales process itself, as well as issues related to public law, regulating, among others, issues related to obtaining permits to run a publicly available pharmacy, the conditions of its operation, and tax consequences.
The activity of running such an enterprise is a strictly regulated activity, which means that its performance requires meeting specific conditions specified in the provisions of the Pharmaceutical Law.
In recent years, the provisions of the Pharmaceutical Law have undergone further revolutions and dozens of minor changes. Regarding the sale of pharmacies, the key event was the entry into force of two amendments to the Pharmaceutical Law - of April 7, 2017 (known as "Pharmacy for the Pharmacist") and of July 13, 2023 (known as "Pharmacy for the Pharmacist 2.0").
Taking into account the above, in order to properly discuss the title issue, we refer below to:
I. Permissible forms of running a pharmacy business - who can run a pharmacy?
A. Personal requirements - primarily the sale of a pharmacy to a pharmacist
The business of running a community pharmacy is a strictly regulated activity, which is reflected in: among others. in that pharmacies cannot be run in any legal form chosen by the entrepreneur, but must meet the requirements imposed in this respect by the legislator. Pursuant to the content of Art. 99 section 4 Pharmaceutical Law:
The following persons have the right to obtain a permit to run a public pharmacy:
1) pharmacist with the right to practice the profession, leading sole proprietorship business;
2) general partnership or a partnership, whose subject of activity is exclusively running pharmacies and whose partners (partners) are exclusively pharmacists who have the right to practice the profession referred to in point 1;
3) university offering education in the field of pharmacy.
It follows from the above that, in the current legal situation, it is impossible to start running a public pharmacy in a form other than that described in the above-mentioned regulation, i.e. in the form of a sole proprietorship, a general partnership or a pharmacist partnership. And finally - or in the form of a university offering education in pharmacy.
B. Negative premises - i.e. who cannot open a pharmacy and who cannot buy a pharmacy
In the Pharmaceutical Law, the legislator also provided for a number of negative conditions, the implementation of which means that, despite meeting the above-described subjective requirements, obtaining a permit to operate a pharmacy, and therefore also purchasing it, will not be possible. If the buyer is in the group covered by the above-mentioned inclusions The Provincial Pharmaceutical Inspector will not consent to the transfer or change of a permit to operate a generally accessible pharmacy – more on this later in this text. This is what we are trying to protect you from.
Pursuant to the content of Art. 99 section 3 Pharmaceutical Law:
The permit referred to in section 1 shall not be issued if the entity applying for the permit:
1) runs or has applied for a permit to run a pharmaceutical wholesale store, or engages in intermediation in the trade of medicinal products, or
2) runs more than 1% public pharmacies in the voivodeship or entities controlled by him directly or indirectly, in particular dependent entities within the meaning of the provisions on competition and consumer protection, run a total of more than 1% pharmacies in the voivodeship;
3) is a member of a capital group within the meaning of the Act on Competition and Consumer Protection, whose members run more than 1% generally available pharmacies in the voivodeship.
Pursuant to Art. 99 section 3a Pharmaceutical Law:
The permit referred to in section 1 shall not be issued if the applicant, shareholder or partner of the applicant company:
1) is a partner, including a partner, in a company or companies that run at least 4 generally accessible pharmacies in total or;
2) runs at least 4 publicly available pharmacies, or an entity or entities controlled by it directly or indirectly, in particular an entity or dependent entities within the meaning of the provisions on competition and consumer protection, run at least 4 publicly available pharmacies, or
3) is a member of a capital group within the meaning of the Act on Competition and Consumer Protection, whose members jointly run at least 4 generally available pharmacies, or
4) is a member of the governing bodies of a company authorized to operate a pharmaceutical wholesale store or an intermediary in the trade of medicinal products.
Finally, as stated in Art. 99 section 3aa of Pharmaceutical Law:
It is prohibited to take control within the meaning of the provisions on competition and consumer protection over an entity running a public pharmacy if:
1) the entity acquiring control is an entity other than the entity referred to in section 4 point 1 or 2;
2) entity acquiring control, shareholder or partner of the company being the entity acquiring control:
a) is a shareholder or partner in a company or companies that run at least 4 generally accessible pharmacies in total, or
b) runs at least 4 generally accessible pharmacies, or an entity or entities controlled by it directly or indirectly, in particular an entity or dependent entities within the meaning of the provisions on competition and consumer protection, run at least 4 generally available pharmacies, or
c) is a member of a capital group within the meaning of the provisions on competition and consumer protection, whose members jointly run at least 4 generally available pharmacies, or
d) is a member of the governing bodies of a company authorized to operate a pharmaceutical wholesale store or an intermediary in the trade of medicinal products;
3) as a result of taking over control over an entity operating a publicly available pharmacy, the members of the capital group to which the entity taking over control belongs would run more than 4 generally available pharmacies in total.
It follows from the above that the legislator has set many "traps" for both people selling general pharmacies and their potential buyers, which should always be taken into account before deciding to carry out a transaction. In extreme cases, it may turn out that the conclusion of the contract will lead to the acquisition of an enterprise in the objective sense, but at the same time it will result in the loss of the permit. This defeats the whole point of such an operation.
Hence, during our transactions, our Pharmaceutical Law Office so much attention is paid to identifying potential threats and developing a strategy to minimize them as far as possible.
C. Previous legal status - how it was possible to sell and buy pharmacies before
It should be noted here that the subjective restrictions described above do not apply to entrepreneurs who obtained permission to run a generally accessible pharmacy before the entry into force of the Pharmacy for a Pharmacist and Pharmacy for a Pharmacist 2.0 regulations.
In the legal situation in force until June 25, 2017, the legislator defined the catalog of legal forms permitted to conduct pharmacy activities much more broadly. Pursuant to the content of art. 99 section 4 of the Pharmaceutical Law in force until the date of entry into force of the amendment 4. The right to obtain a permit to operate a pharmacy is granted to a natural person, a legal person and a commercial company without legal personality.
Therefore, in legal transactions there are still generally accessible pharmacies operated both in the form provided for in the provisions currently in force (i.e. sole proprietorships and general partnerships or partnerships) and in the form in force until the date of entry into force of the "Pharmacy for the Pharmacist" (i.e. e.g. in the form of limited partnerships and limited liability companies). The legal form in which the business is conducted also affects both the civil law and administrative law aspects related to the sale of a pharmacy, which will be discussed in more detail later in this article.
II. The form of running a pharmacy business and the method of selling a pharmacy
As indicated above, the form of business activity has an impact on the legal solutions available to an entrepreneur intending to sell a publicly available pharmacy. The range of these solutions will be different for an entrepreneur running a sole proprietorship and different for an entrepreneur who is a commercial law company, and therefore the issue in question is discussed separately for each of the above-mentioned companies. forms of business activity.
A. Sole proprietorship - i.e. the sale of a pharmacy as a sale of an enterprise
If a public pharmacy is run as a sole proprietorship - which may be the case both in the case of entrepreneurs who obtained the permit under the old law and in the case of entrepreneurs who obtained the permit after the entry into force of the "Pharmacy for the Aptekarz" - the entrepreneur has Basically, the only solution available is: sale of the entire enterprise or its organized part.
Pursuant to the content of art. 551 of the Act of April 23, 1964 - Civil Code: "An enterprise is an organized set of intangible and tangible assets intended to conduct business activities. (…)”. In the further part of the cited regulation, the legislator in the form of an open catalog (numerus apertus) indicated what the enterprise is composed of - including among others. markings individualizing the enterprise, ownership of real estate, movable property and other property rights, but also - which is particularly important from the perspective of the analyzed issue - concessions, licenses and permits.
However, it should be noted that in the case of a permit to operate a community pharmacy, its transfer to the buyer is not automatic, but requires the initiation of an administrative procedure before the Provincial Pharmaceutical Inspector, as discussed later in this text.
At the same time, an enterprise understood in this way, i.e. a certain economic entity, may be the subject of civil law transactions, i.e. subject to sale by way of legal transactions. Pursuant to the content of Art. 552 CC A legal transaction relating to an enterprise includes everything that is part of the enterprise, unless the content of the legal transaction or specific provisions states otherwise..
In order to conclude an enterprise sale agreement, the legislator has provided for a special form of legal transaction in the form of a written form with a notarially certified signature (Article 751 of the Civil Code), which, however, may not be sufficient in a situation where the enterprise includes real estate (Article 158 of the Civil Code).
Moreover, the issue of liability of both the seller and the buyer of the enterprise was regulated in a specific way. Pursuant to Art. 554 CC: The purchaser of an enterprise or farm is jointly and severally liable with the seller for his obligations related to running the enterprise or farm, unless he was not aware of these obligations at the time of purchase, despite exercising due diligence.. Joint and several liability, in turn, means that a creditor whose receivable is related to the enterprise run by the seller will be able to recover his entire receivable from both the seller of the enterprise and its purchaser (Article 366 § 1 of the Civil Code).
It follows from the above that an extremely important element of the transaction - primarily from the perspective of the pharmacy buyer - is to conduct a reliable and extremely thorough examination due diligence the acquired enterprise before the transaction is concluded, which will help avoid liability for third party obligations in the future. The Kłodziński Law Firm provides full support to persons interested in purchasing a pharmacy in conducting a comprehensive audit of the acquired enterprise also in this respect.
B. Sale of a company operating a pharmacy (general partnership, professional partnership and limited partnership)
Pharmacy activities could be carried out in the form of a general partnership or a professional partnership before the entry into force of Apteka dla Aptekarz, but currently it is the only - apart from sole proprietorship - permitted form of conducting this activity. Moreover, there are also pharmacies operated in the form of limited partnerships, which obtained permits under the old law.
Both a general partnership, a professional partnership and a limited partnership belong to the category of the so-called personal commercial law companies. Unlike capital companies (such as a limited liability company and a joint-stock company), partnerships do not have legal personality, creating a category of the so-called defective legal persons, i.e. organizational units without legal personality which were granted legal capacity by the legislator (Article 331 of the Civil Code).
It follows from the above that a general partnership may be the subject of rights and obligations, may have assets separate from the assets of its partners, may sue and be sued, and may also run a business under your own name in your own name. So a company and an enterprise are not the same.
Therefore, since both a general partnership, a professional partnership and a limited partnership can run an enterprise in their own name under their own name, it should be noted that all these companies have the possibility of concluding an agreement on the sale of all or part of the enterprise - in the manner described above when discussing sole proprietorship. .
In such a situation, however, it should be borne in mind that the sale of even the entire enterprise will not automatically result in the dissolution of the company, and therefore - if the partners do not intend to continue running the business - this will not always be the preferred method considering the interests of the seller, as well as pharmacy buyers.
On the other hand, it cannot be ruled out that the company will run several publicly available pharmacies, and only part of them (or one pharmacy) will be sold. Then the only solution will be to sell the so-called organized part of the enterprise covering these several (or one) pharmacies and the continuation of business activities in the scope of other pharmacies by the company.
The second proposed solution - recommended in a situation where the partners have decided to completely terminate the business activity - is to sell all the rights and obligations of the company's partners to third parties who will "take over" the running of the pharmacy.
It should be remembered that in the case of partnerships, commercial law cannot be said stricto sensu about shares in the company's capital (as is the case with a limited liability company), but about a certain set of rights and obligations of a property and corporate nature resulting from the fact of participation in the company. The disposal of this bundle of rights consequently leads to a change in the composition of the company - which, however, continues to conduct business activities uninterruptedly.
It should be borne in mind that the disposal of all rights and obligations in a partnership is subject to certain restrictions:
Pursuant to the content of Art. 10 § 1 of the Act of 15 September 2000 - Commercial Companies Code: "All the rights and obligations of a partner in a partnership may be transferred to another person only if the partnership agreement provides so." Moreover, pursuant to § 2: "All the rights and obligations of a partner in a partnership may be transferred to another person only after obtaining the written consent of all other partners, unless the company agreement provides otherwise. Therefore, before making a decision to sell all rights and obligations in the company, it is necessary to carefully analyze the company agreement in terms of the existing restrictions and possibly change the provisions blocking the transaction.
It is important to remember about the specific liability of the acquirer of all rights and obligations in a partnership, regulated in Art. 10 § 3 of the Commercial Companies Code, according to which: In the event of transfer of all the rights and obligations of a partner to another person, the obligations of the withdrawing partner related to participation in the partnership and the obligations of this partnership the acting partner and the partner joining the partnership are jointly and severally liable. At the same time, in this regulation, the legislator did not make joint and several liability dependent on the performance of acts of due diligence, as was the case in the context of Article 554 of the Civil Code discussed above, which is why it is even more important in the case of a decision to acquire rights and obligations in a company to carefully examine the legal and financial status of the company before making a decision. decision to acquire rights and obligations from existing partners.
To sum up - if the pharmacy is run in the form of a general partnership, partnership or limited partnership, partners who want to sell the pharmacy have two options: 1) sale of the entire or organized part of the enterprise to a third party - recommended when only part of the business venture is to be sold, 2) sale all rights and obligations of the company's partners to third parties - recommended in a situation where the partners would like to definitively discontinue their business. However, the choice of one of the above solutions must be preceded by a detailed analysis of the legal and factual situation of both the partners and the company itself.
B. Sale of a pharmacy when it is run by a limited liability company
Finally, a few words should be devoted to a limited liability company as another type of company commonly found in legal transactions and undoubtedly the most popular (next to sole proprietorships) legal form of conducting business. At the same time, as mentioned above, in the current legal situation it would be impossible to establish a pharmacy in the form of a limited liability company due to the restrictions resulting from Art. 99 section 4 Pharmaceutical Law. Therefore, the following comments will necessarily apply to companies that obtained permission to operate a pharmacy before the entry into force of the Pharmacy for Aptekarz:
A limited liability company is a capital commercial law company that has legal personality from the moment of entry into the National Court Register. Moreover, this company - unlike the partnerships described above - can be established and run by just one person. At the same time, a limited liability company may be established for any legally permissible purpose, so it does not necessarily have to be a company established to conduct business activities (Article 151(1) of the Commercial Companies Code).
In the case we are interested in, however, limited liability companies carrying out pharmacy activities undoubtedly conduct business activities, and therefore they run businesses in their own name and under their own business name. Therefore, all comments made above regarding the sale of the entire or organized part of the enterprise remain valid also in the case of this form of business.
The second available option - as in the case of partnerships - is to change the personal composition of the partners of a limited liability company, which is done by selling the shares they are entitled to in the company's share capital. For the effective sale of shares in a limited liability company, it is first necessary to conclude an agreement between the seller and the buyer. At the same time, for this contract - in accordance with Art. 180 of the Commercial Companies Code - the legislator provided for a special form in writing with notarially certified signatures.
Moreover, please remember that in accordance with Art. 182 § 1 of the Commercial Companies Code: "The sale of a share, part thereof or a fractional part of a share and the pledge of a share may be made subject to the consent of the company or otherwise restricted in any other way." Therefore, before concluding the planned transaction, it is again necessary to carefully analyze the provisions of the limited liability company agreement in order to identify any possible restrictions on the transfer of shares. Finally, no less important is the issue of reporting appropriate changes to the registry court keeping the company's registration files (form KRS ZE or KRS-ZEL3 in the case of S24 companies), which must be accompanied by a number of required documents.
To sum up, the shareholders of a limited liability company have two options to sell a general pharmacy run by the company: 1) sale of all or part of the enterprise run by the company - which, however, does not automatically lead to the termination of the company's operations, 2) sale of shares in the company's share capital - which leads to to change the composition of the company, which continues to conduct business activities, but with new partners. However, selling shares is not always possible.
III. I will sell the pharmacy, but only to a pharmacist - who is entitled to purchase a generally accessible pharmacy?
The above-described methods of selling a general pharmacy focused primarily on civil law aspects related to the sale of an enterprise or its organized part, as well as the sale of all rights and obligations in a partnership or shares in a capital company. From a civil law perspective, the answer to the question of who can purchase a pharmacy could be anyone who has legal capacity. However, the above would not take into account the public law perspective, i.e. the fact that pharmacy activities are regulated activities and, therefore, certain restrictions in this respect result from the provisions of the Pharmaceutical Law.
There is no doubt that the entity purchasing a pharmacy (this term includes both the acquisition of an enterprise and the acquisition of rights and obligations in a company) must change the permit to operate a publicly available pharmacy. At the same time, in accordance with Art. 104a of the Pharmaceutical Law, the authority issuing the permit, i.e. the Provincial Pharmaceutical Inspector, transfers the permit to the purchaser of the pharmacy if the purchaser meets the requirements described in Art. 99 section 3, 3a, 4-4b and art. 101 points 2-5 of the Pharmaceutical Law - i.e. the same as those imposed on people who want to start running a pharmacy business.
Above, we have already described the requirements that the legislator imposes on persons intending to start running a pharmacy business under the applicable legal status. At this point, it is only worth recalling that these people must among others. have the status of pharmacists with the right to practice their profession. This condition should be met regardless of whether they want to start this activity as a sole proprietorship or as a general partnership or partnership (Article 94(4) of the Pharmaceutical Law). Moreover, it is necessary to analyze the situation each time through the prism of the described anti-concentration regulations (Article 99, section 3a and section 3aa of the Pharmaceutical Law).
Is there a pharmacy purchase in Poland? Is there anyone who will guarantee that I will sell the pharmacy?
In practice, over the last eight years of activity on this market, I have not encountered such an institution, which means no. If only because each pharmacy is not the same, and the number of conditions that must be met for the transaction to take place is too high. It is also a highly controlled activity. This, in turn, means that adding even one rotten apple to the basket can quickly spoil the rest (this is not as far-fetched a metaphor as it seems). However, of course, there are entrepreneurs who are always willing to buy a good pharmacy at a good price. Inevitably, we have already conducted transactions with many of them and some of them "left their business cards" when leaving the office.
However, these people usually operate in specific voivodeships or parts of Poland and do not always offer the highest prices possible. This, of course, does not mean that you should not try to negotiate with them.
IV. Transfer of a license to operate a pharmacy
A. Initiation of the administrative procedure regarding the transfer of the license to operate a pharmacy
This is the administrative part that must take place after concluding a civil contract, the subject of which is the sale of the pharmacy and the premises. This procedure is subject to a different legal regime than the previous activities. Pursuant to Art. 104a section 1 Pharmaceutical Law:
ABOUTthe authorizing authority transfers the permit referred to in Art. 99 section 1, to the entity that purchased the entire publicly available pharmacy, within the meaning of Art. 551 of the Act of 23 April 1964 - Civil Code, from the entity to which the permit was issued, if:
1) the buyer of the pharmacy meets the requirements referred to in Art. 99 section 3, 3a, 4-4b and art. 101 points 2-5 and accepts all the conditions contained in the permit in a written declaration;
2) the address of the pharmacy does not change.
It follows from the above that the transfer of a permit to operate a generally accessible pharmacy takes place through the authority that issued the permit, i.e. the Provincial Pharmaceutical Inspector. At the same time, the transfer of the permit takes place in a strictly formalized administrative procedure, which obliges the applicant to comply with the legal requirements.
An administrative matter is initiated by submitting an appropriate application to the above-mentioned authority. As follows from the above-mentioned provision, the parties to this proceeding are the entity that purchased the pharmacy and the entity to which the transferred permit was issued. In short – the buyer and seller of the pharmacy. They are obliged to jointly submit an application for the transfer of a permit, and - pursuant to Art. 105 of the Pharmaceutical Law - payment in the amount of five times the minimum wage. The buyer must meet the legal requirements and is therefore obliged to submit the following along with the application:
– A written declaration of acceptance of all conditions contained in the permit,
– Declaration that the address of the pharmacy does not change,
– Documents confirming that it meets the requirements described in the above paragraph (it is not subject to exclusion from the group of entities authorized to obtain authorization under Article 99(3), 3a, 4-4b and Article 101(2-5) of the Pharmaceutical Law),
– Agreement – in the appropriate form, as described in the first part – for the sale of the enterprise (pharmacy),
– Confirmation that you are an entity that can obtain a permit, i.e. a document proving the right to practice the profession of pharmacist and/or an excerpt from CEIDG/KRS confirming the appropriate nature of the activity/company,
– Documents confirming that the buyer guarantees the proper operation of the pharmacy,
And not only…
…. it should be emphasized that the set of documents described above that must be attached to the application does not result directly from the provisions of the Act. Moreover, the catalog indicated above is not exhaustive. The regulations specify the minimum requirements that the buyer of a pharmacy must meet, without specifying how he or she is to demonstrate compliance with these requirements. Therefore, knowledge of the practices of individual WIFs is of key importance here.
B. Decision of the Provincial Pharmaceutical Inspector on the transfer of the license to operate a pharmacy
After conducting a detailed procedure, examining the application and the applicant's status in terms of compliance with the legal requirements, the inspector issues an appropriate decision. The entire procedure ends with a decision being issued by the Provincial Pharmaceutical Inspector, in which - if the application is approved - the license to operate a generally accessible pharmacy is transferred to the buyer. Only then can it be said that the procedure for selling the pharmacy as an enterprise is complete and the buyer can run its business without any problems.
In the event of a negative decision, the applicant is of course entitled to an appeal path provided for by law - first through jurisdictional proceedings to the Chief Pharmaceutical Inspector, then through judicial and administrative proceedings through a complaint to the Provincial Administrative Court and then through a cassation appeal to the Supreme Administrative Court. The above often means a several-year battle for justice, which is why it is so important to conduct the pharmacy sale process in such a way as to avoid the need to conduct it.
C. Securing the pharmacy's operations - how to sell the pharmacy without closing it? How to minimize the closing time of the pharmacy?
It should be emphasized here that there is a view that from the moment the pharmacy in the form of an organized part of the enterprise is transferred to the buyer (see point II), the previous owner loses the right to run a generally accessible pharmacy on the basis of the permit. The above may mean the need to close the pharmacy to patients for the period from the conclusion of the appropriate contract until the decision to transfer the license to operate it to the new owner is obtained. And as we know, every day without sales means measurable financial losses, and after a new opening, patients do not come back so quickly. However, in the next paragraph we present some solutions.
How to quickly conduct a pharmacy sale transaction to maintain its continuity of operation?
Only at first it seems that nothing can be done here. Fortunately, the practice has already developed methods that allow to minimize the time during which the pharmacy will not be able to sell medicinal products and thus generate the necessary revenues. There are several ways to do this, from less to more risky - especially from the point of view of potential problems with WIF and the risk of returning the entire refund to the National Health Fund.
In such a situation, it is crucial to carefully and correctly construct the sales contract for an organized part of the enterprise. The content of the application for the transfer of the license to operate a pharmacy to the buyer should be adjusted accordingly. Some, in turn, are pushing for a different, slightly risky method that allows them to continue their business based on a larger number of contracts.
Due to many years of experience in conducting transactions on the pharmacy market, our Pharmaceutical Law Office has the necessary know how in the above respect. We can solve this so that our clients are not forced to suspend their operations for several weeks, which in turn allows them to avoid real financial losses. That is why, among other things, our participation in the transaction usually pays off for everyone.
V. Sale of the pharmacy - a brief presentation of the entire procedure
A. a brief presentation of the entire procedure leading to the sale of the pharmacy
To summarize the pharmacy sales procedure:
1. First, you need to find a buyer capable of purchasing the pharmacy
and appropriate capital.
2. The Buyer must make sure that he/she belongs to the group of entities authorized to have a permit to operate a pharmacy, and that he/she is not secondarily excluded from this group by the relevant provisions of the Pharmaceutical Law;
3. The Buyer and the Seller must conclude a properly constructed contract for the sale of the enterprise within the meaning of Art. 551 et seq. of the Civil Code (of course, shares in commercial law companies operating pharmacies may also be sold). You also need to properly arrange the transfer of title to the premises (i.e., for example, a lease agreement).
4. The contract must be concluded in an appropriate form (generally in writing with notarially certified signatures, in certain cases a notarial deed is required) and contain the necessary provisions - for example regarding the fate of settlements or medications;
5. The buyer must exercise appropriate diligence when analyzing the acquired enterprise - the best form is to conduct a professional audit and comprehensive due diligence;
6. The Buyer and the Seller must submit an application for the transfer or change of the license to operate a pharmacy, together with the appropriate documentation, to the Provincial Pharmaceutical Inspector and cooperate with him in the proceedings to examine the application and ensure that the purchaser meets the legal requirements;
7. After the decision to transfer or change the authorization to the buyer is issued, the sale of the pharmacy may be considered completed
B. Some potential pitfalls for sellers and buyers in the process of selling a community pharmacy
Selling a pharmacy is a process that rarely goes fully according to plan, especially when it is not prepared properly. From the thought of selling the pharmacy - to determining whether it is possible, whether there are people willing, how much I can sell it for and within what time - unfortunately, these are not all the problems our clients face. Virtually every aspect of this activity involves some risk, such as:
1. Failure to regulate the issue of the right to the premises in which the pharmacy is located (the issue of ownership of the premises, its transfer as part of the sale of the enterprise or, for example, settling the lease relationship with the lessor, entering into an ongoing lease relationship with an appropriate term, etc.);
2. Inadequate regulation in the contract of sales of movable property in the pharmacy, such as medicines or equipment, as well as tax issues;
3. Faulty analysis of the legal status and history of the pharmacy's operations;
4. Incorrect valuation of the pharmacy - i.e. setting an inadequate amount of fee for the pharmacy. A good study is a verification of such issues as, among others, revenue, margin, order level, opening hours, personnel costs, gross revenue, net revenue, rent for the premises, level of arrears, overdue status of the warehouse;
5. Incorrect preparation of the application to the Provincial Pharmaceutical Inspector;
6. Attaching incomplete documentation along with incorrect demonstration of necessary issues, such as meeting the requirements of the relevant competition (which may significantly prolong the proceedings before the Inspector and result in additional costs in the form of paying an expert in this field);
7. Inappropriate drafting of the contract - including: in terms of its form, as well as failure to pay the appropriate tax to the tax office, inappropriate definition of the parties' obligations;
8. Incorrect determination of the moment of transfer of the enterprise, and, as a consequence, unnecessary loss of several dozen or more days of running the pharmacy (this is the time when people must receive remuneration, and the owner of the premises often demands rent).
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Incorrect definition of the pharmacy's debt - the level of liabilities may cause the transaction to suffer for a long time.
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Incorrect definition of the payment, its mechanism, or, most risky of all, consent to an unsecured payment under the table. This is often a recipe for disaster.
C. Summary. Is it worth using a lawyer's help when buying or selling a pharmacy?
A faulty sale of a pharmacy (or its purchase) usually brings much more loss than benefit. In not so rare cases of incorrect performance of this procedure, it happens that non-professionals lose their license to run a pharmacy.
This situation is a loss for everyone - owners, employees and patients. A lawyer experienced in pharmaceutical law, comprehensively servicing the entire project, should prepare a solution that is, on the one hand, the most satisfactory for both the seller and the buyer in terms of business, but above all, it is as safe as possible for all parties to the transaction.
It should be noted here that the pharmacy sales market is a relatively niche market, and much of the knowledge is developed through many years of experience. Therefore, it is crucial to choose advisors who already specialize in such transactions. Fortunately for every client, there are a dozen or so professionals in Poland operating efficiently on this market.
How our law firm can help you.
Together with our team Pharmaceutical Law Office we can guide you through this difficult process. We support clients with our many years of experience, market knowledge and contacts, legal knowledge and negotiation skills.
We usually start with support in preparing the pharmacy for sale and preparing an offer. We specialize in searching for buyers for pharmacies, negotiating price conditions and determining other parameters and provisions of the pharmacy sale agreement. If necessary, we also undertake the preparation and verification of contractual security, tax consultancy, audits and valuation of pharmacies.
We provide support from both the legal and business side in the transaction of purchasing or selling a pharmacy. We have experience on both sides of the negotiation table, which allows us to effectively find and understand the other side, and then negotiate the most favorable transaction terms for our clients in a given situation.
If you want to benefit from comprehensive support in the purchase or sale of a pharmacy or to prepare well for this process, please contact us via e-mail sklepzapteki@klodzinskikancelaria.pl or by phone at +48 509 259 434
Our office offers the option of electronic filing booking an initial consultation date online or at our headquarters in Warsaw. If necessary, we also have a branch in Krakow, and we are happy to meet remotely via videoconferencing with clients from other parts of Poland. We conduct transactions both in large cities and in very small towns throughout the country.
Certainly, each such transaction is quite complicated and stressful. We are here to help you do it as profitably as possible, but at the same time, carry it out safely and honestly.