Asset Purchase vs. practice sale

Client is selling his dental practice. 

He said the sale is an asset purchase sale not a practice sale  so would the new owner be able to  continue the current retirement plan.  Or do they have to terminate the current plan and start a new one with the new owner?

In an asset sale, generally the seller's employees start participating in the buyer's 401(k) plan (assuming the buyer is an existing practice with a plan in place). They generally are granted service credit for vesting and eligibility as of their original date of hire with the seller so they don't start over from scratch. Generally the seller terminates the existing plan and everyone rolls over their balances. 

If the buyer doesn't have a plan, the buyer can either (1) assume the seller's 401(k) plan or (2) start a brand new one. If the buyer assumes the plan, everything stays as-is (vesting, eligibility, etc.); the plan just has a new sponsor. 

Hope this helps.