1. PARTNERSHIP AGREEMENTS
Cynthia Cummings,
Employment Adviser

2. Why have a written Partnership Agreement?
ensures the proper conduct of the business arrangement
avoids future disputes
negates the need to have a partnership at will

3. Partnership at Will Partnership Act 1890
Partnership at Will requires dissolution when partners leave or join
With an agreement this can be negated
Necessary to protect financial aspects

4. New Partner
The Partnership Agreement can be worded so a new partner can be included in the partnership by the use of a short addendum
Agrees to bound by terms of existing agreement
Parity within 3 years of joining(maximum)

5. What needs to be in the Partnership Agreement?
Date of agreement
Names and addresses of partners
Title of firm (Business Names Act 1985)
Address of practice premises
The nature of the business
Commencement and duration

6. The Capital Property Equipment Drugs stocks Fixture/fittings
“Working capital”

7. Premises - Ownership/Rent/Payments
Expenses of the partnership
Premises costs
Employee costs
Accountancy
Stationary
Bank charges
Practice telephones
Should be paid before profits divided

8. Personal Expenses
Home
Home telephone
Car

9. Income of the Partnership
All professional fees and earnings
Posts outside the practice
- part-timers
- seniority payments
- postgraduate education allowance

10. Division of receipts
Partnership agreement should state each partners share and allow for any future adjustments
To be properly represented as a partner. PCT must be satisfied that:
Has appropriate profit share of at least
Full time = 1/3rd of greatest
3/4 time = 1/4 of greatest
1/2 time = 1/5 of greatest

11. Attention to the affairs of the firm
Time commitment to practice should be stated
Usually expected to devote substantially all their time and attention
Outside work must not conflict
Permission should be gained from others
Should not be unreasonably withheld

12. Tax No longer joint and several liability on the partnership profits
but
each partner will have to complete an annual self assessment for Inland Revenue
Agreements need to provide for the keeping of records
Partnerships may have a tax reserve account

13. Staff The agreement should not allow summary dismissal
All partners would be liable for an unfair or constructive dismissal
All should have opportunity to voice opinion
Tribunal limit for wrongful dismissal no £50,000+

14. Decision Making Most matters settled by majority or
eg 6 partners - decisions of 4:2
3 partners - unanimity
All entitled to be heard
Any partner not a party to the making of the decision is not bound by it
Unanimous decisions
Change of partnership business
Admittance of a new partner
Dismissal of staff members

15. Holidays and Study Leave
Should be separated allocations
Should be same for all partners
Restrictions on how many may be off at one time
Employment of locums

16. Sickness Absence
Personal Health Insurance/income protection/locum expenses
PCT contribute towards locum
Most practices cover the first month
Larger practices sometimes cover longer
Expulsion for lengthy incapacity
LEAVING PARTNERSHIP

17. Leaving the Partnership Voluntarily
Notice period
Usually at least 3 months
Detail mechanism for sorting out finances
eg premises, drawing, capital

18. Leaving the practice involuntarily
Lengthy incapacity
Bankruptcy
Removal/suspension from register or medical list
Gross breach of partnership agreement
drug or alcohol addiction
No Green Socks Clauses!

19. Retirement Terms of Service require GPs to retire at 70
Retirement possible before 70 - for agreement
Need to consider possibility of “carrying” an elderly partner not capable of doing fair share of work

20. Restrictive Covenant To be enforceable, it must be reasonable
Patients of practice at time of leaving
One year
Two mile - of practice area

21. Defence Body Membership
It is essential and the agreement should oblige partners to subscribe

22. Arbitration BMA will mediate only in a dispute
Provision for an arbitrator needed
However avoid use of arbitrator if possible
- EXPENSIVE!

23. Banking and Accounts Bankers and Accountants should be named
Provisions for drawing cheques
Free access to accounts for all partners

24. AND FINALLY When joining a partnership
Get a “feel” for the practice and partners
Ask to see accounts and other books
Look for fairness and equity
Have the partnership agreement checked by local BMA Office
Remember - there are more GP vacancies than GPs to fill them at the moment
GET IT RIGHT!

25. Salaried GPs

26. PCT Contracts
Employed directly by PCT NHS conditions should continue

27. Contract of Employment
Employee of Practice
Governed by practice terms and conditions
Will previous NHS Service be recognised?

28. Within the contract:- Parties Location Pay
Salary - range and starting salary

29. Leave Annual - how much? Study - how much? Sick leave Maternity leave
When?
Application?
Study - how much?
When? application? Who pays?
Sick leave
notification and certification
entitlement to paid sick leave
Maternity leave
requirements on advising practice
entitlement to pay

30. Work outside the practice Defence Body
Notice Period
Work outside the practice
Defence Body
membership
subscription
Mileage allowance
Telephone allowance