<p>Sykes Pharmacy Buyer’s Side Checklist</p><p>PHARMACY BUYER’S SIDE CHECKLIST The decision to purchase a pharmacy is important and exciting. You will find that there are many details to address when moving forward with your purchase. Overlooking these details can cause major financial headaches down the road. This checklist will act as your safety net as you make your leap into the pharmaceutical business world. At the beginning of your pharmacy purchase, consider…  Asset purchase versus stock purchase and the characteristics of each.  Due diligence investigation procedures.  Use of a valuation professional.  Consulting or non-compete agreements for former owners and the advantages of each.  Methods for retaining key employees.  Developing a written business plan, including capitalization and financing requirements. If you’re purchasing assets…  Consider the appropriate type of legal entity to operate the acquired business.  Obtain tax and employer identification numbers, business licenses, etc. (if starting a new business).  Determine employee benefit plans to adopt (if starting a new business).  Prepare corporate documents, if starting a new entity (corporate charter and bylaws, LLC operating agreement, etc.).  Determine the fair market value of the target’s assets and allocate the purchase price.  Determine that the buyer’s and seller’s Forms 8594 are consistently prepared.  Set up the tax depreciation schedule using the information from the allocation of the sales price. If you’re purchasing stock…  Review existing employee benefit plans.  Evaluate potential contingent and undisclosed liabilities.  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. When you’re ready to set-up your pharmacy business…  Determine liability insurance requirements.  Prepare compensation agreements, rental agreements, loan documents, etc.  Install accounting and payroll system.  Explore seller-financing opportunities. Tax details to keep in mind…  Consider related party tax rules, if necessary.  Identify first year tax elections that should be made.  For C corporations, determine capital structure and owner compensation to avoid the double taxation issue.</p>