2 Why have a written Partnership Agreement? ensures the proper conduct of the business arrangementavoids future disputesnegates the need to have a partnership at will
3 Partnership at Will Partnership Act 1890 Partnership at Will requires dissolution when partners leave or joinWith an agreement this can be negatedNecessary to protect financial aspects
4 New PartnerThe Partnership Agreement can be worded so a new partner can be included in the partnership by the use of a short addendumAgrees to bound by terms of existing agreementParity within 3 years of joining(maximum)
5 What needs to be in the Partnership Agreement? Date of agreementNames and addresses of partnersTitle of firm (Business Names Act 1985)Address of practice premisesThe nature of the businessCommencement and duration
6 The Capital Property Equipment Drugs stocks Fixture/fittings “Working capital”
7 Premises - Ownership/Rent/Payments Expenses of the partnershipPremises costsEmployee costsAccountancyStationaryBank chargesPractice telephonesShould be paid before profits divided
9 Income of the Partnership All professional fees and earningsPosts outside the practice- part-timers- seniority payments- postgraduate education allowance
10 Division of receiptsPartnership agreement should state each partners share and allow for any future adjustmentsTo be properly represented as a partner. PCT must be satisfied that:Has appropriate profit share of at leastFull time = 1/3rd of greatest3/4 time = 1/4 of greatest1/2 time = 1/5 of greatest
11 Attention to the affairs of the firm Time commitment to practice should be statedUsually expected to devote substantially all their time and attentionOutside work must not conflictPermission should be gained from othersShould not be unreasonably withheld
12 Tax No longer joint and several liability on the partnership profits buteach partner will have to complete an annual self assessment for Inland RevenueAgreements need to provide for the keeping of recordsPartnerships 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 dismissalAll should have opportunity to voice opinionTribunal limit for wrongful dismissal no £50,000+
14 Decision Making Most matters settled by majority or eg 6 partners - decisions of 4:23 partners - unanimityAll entitled to be heardAny partner not a party to the making of the decision is not bound by itUnanimous decisionsChange of partnership businessAdmittance of a new partnerDismissal of staff members
15 Holidays and Study Leave Should be separated allocationsShould be same for all partnersRestrictions on how many may be off at one timeEmployment of locums
16 Sickness AbsencePersonal Health Insurance/income protection/locum expensesPCT contribute towards locumMost practices cover the first monthLarger practices sometimes cover longerExpulsion for lengthy incapacityLEAVING PARTNERSHIP
17 Leaving the Partnership Voluntarily Notice periodUsually at least 3 monthsDetail mechanism for sorting out financeseg premises, drawing, capital
18 Leaving the practice involuntarily Lengthy incapacityBankruptcyRemoval/suspension from register or medical listGross breach of partnership agreementdrug or alcohol addictionNo Green Socks Clauses!
19 Retirement Terms of Service require GPs to retire at 70 Retirement possible before 70 - for agreementNeed 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 leavingOne yearTwo 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 neededHowever avoid use of arbitrator if possible- EXPENSIVE!
23 Banking and Accounts Bankers and Accountants should be named Provisions for drawing chequesFree access to accounts for all partners
24 AND FINALLY When joining a partnership Get a “feel” for the practice and partnersAsk to see accounts and other booksLook for fairness and equityHave the partnership agreement checked by local BMA OfficeRemember - there are more GP vacancies than GPs to fill them at the momentGET IT RIGHT!
26 PCT ContractsEmployed directly by PCT NHS conditions should continue
27 Contract of Employment Employee of PracticeGoverned by practice terms and conditionsWill 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 leavenotification and certificationentitlement to paid sick leaveMaternity leaverequirements on advising practiceentitlement to pay
30 Work outside the practice Defence Body Notice PeriodWork outside the practiceDefence BodymembershipsubscriptionMileage allowanceTelephone allowance