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Do I need a partnership agreement for my GP practice?

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While GPs are doctors first and foremost, for those in a partnership practice they are also business people. It is important, therefore, that those in partnership set up their business on firm business foundations.

One of the primary ways in which this can be done is to have a professionally drafted partnership agreement. As the majority of surgeries are operated as general partnerships (due to much of the legislation surrounding GP contracts), in the absence of a written agreement the partnership will be governed by the Partnership Act 1890. This may not always reflect the reality of your practice.

A partnership agreement is, in many respects, like an insurance policy, in that you will only really need it if something goes wrong. However, there are clearly benefits in having clarity on various issues which may arise, whether that be the procedure for paying out a doctor’s capital share on retirement, or how to process in the event of a fall out between doctors.

Some key aspects which should be covered in the partnership agreement are as follows:

  • The capital share of each partner. If not expressly stated, then the Partnership Act 1890 provides that the practice is owned equally.
  • The profit share of each partner. Again, the Partnership Act provides that each doctor is entitled to the same, if not otherwise stated.
  • Decision making and management rules. (You may wish to reserve certain decision to senior GPs.)
  • The entitlements of the partners with regards to things such as annual, parental and study leave. Remember that partners are not employees and, as such, standard employment rights do not apply.
  • Procedures for the appointment and retirement of partners. In theory, under the Partnership Act, the retirement of a partner would result in the termination of the partnership.
  • Procedures in the event of a partnership dispute, including steps for expulsion of a partner in the event of serious wrongdoing. The Partnership Act provides that expulsion of a partner is not possible unless specifically agreed in writing.

There are, of course, many other points which would be covered by a comprehensive agreement. However, these are some of the main areas we would recommend for your GP partnership agreement.

For more information on partnership agreements or any other business protection matter, contact David Filmer on 01772 258321 or David.Filmer@harrison-drury.com  

 


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