Preventing risk in medical institution acquisitions

With the government promulgating a series of policies to encourage and guide social capital to develop medical and health undertakings in recent years, social capital is constantly participating in M&A, reorganization and restructuring of medical institutions. Among them, non-profit medical institutions are more encouraged by the government and have gradually become a new hotspot for investment. Due to its particularity, such acquisitions are different from ordinary acquisitions of shares, and therefore lawyers should know the possible legal risks in the acquisition process as well as possible.

Real estate and land ownership. Many medical institutions, due to age-old problems like vague property rights, usually find that because the land-use certificate is owned by the sponsor, therefore the property ownership certificate is also owned by the organizer, or not handled due to the principle of integration between house ownership and land-use rights.

Moreover, in the financial account of the medical institutions, these buildings that do not have a property ownership certificate are still listed in the fixed assets and depreciated. In addition, some medical institutions still have some self-constructed illegal structures that remain in use due to various problems left over by history. During the course of due diligence, lawyers should make a field visit to the real estate used by the institution, to clarify the property ownership and actively communicate with the original sponsor of the medical institution to handle the transfer of premises.