Dental partnership agreements
What is a partnership?
Whatever profession you are in, the duties and liabilities of partners are governed by the Partnership Act 1890 or a partnership agreement.
A partnership exists where two or more individuals carry on business in common with a view to a profit. No documentation is required to create a partnership and therefore you should exercise great caution in your dealings with others so as to avoid forming a partnership inadvertently.
Why have a written Dental Partnership Agreement?
It is always recommended to have a written dental partnership agreement specifically tailored to your requirements in order to clearly deal with issues such as profit sharing, disputes, or what happens if a partner dies or retires from the practice and how the outgoing partner’s shares of the practice should be valued
If you don’t put a written dental partnership agreement in place, then you will be governed by the Partnership Act 1890 which being over 100 years old does not cover many of these issues directly or in enough detail and in a way which is relevant to the modern day. For example, if a partner carries out an act which in the reasonable opinion of the other partners is likely to have a seriously detrimental effect on the practice, the partners may under their written dental partnership agreement give notice to expel the unmanageable partner. Without a written dental partnership agreement the partners would have no right to expel the partner and unless an agreement could be reached would have to instead dissolve the partnership.
What are the risks of not having a written Dental Partnership Agreement?
The risk of not having a properly drafted dental partnership agreement is that a partnership dispute arises leading to lengthy and costly litigation. A partnership agreement will provide certainty and a clear structure to how the partnership operates and the relationship between the partners.
It is important to remember that every partner in the partnership is an agent of the others. This means that the partner may enter contracts or dispose of partnership property in the ordinary course of the partnership business, therefore, binding all of the partners. It is therefore vital that these matters are dealt with in a formal dental partnership agreement to prevent one partner leading the others into financial difficulty.
How can the specialist dental solicitors at Ironmonger Curtis LLP help?
The specialist dental solicitors in our Dental Team will discuss the requirements of your partnership and can draft a dental partnership agreement specifically tailored to your needs and requirements which will narrow the opportunity for disputes to arise and help your practice to run smoothly. Not only will our dental solicitors listen to your requirements, they will also use their experience to suggest practical and productive ways forward or solutions to problems you might have.
Whilst our solicitors are based in Sheffield, South Yorkshire, they represent dentists across England and Wales. For more information on Dental Partnership Agreements and how Ironmonger Curtis LLP can assist your practice, please contact our specialist dental solicitors by email at firstname.lastname@example.org or by telephone on 08452252635.