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Strange as it may sound, your GP partnership may be governed by a piece of legislation that came into existence during the reign of Queen Victoria.
In the absence of a written agreement, if you operate your practice in common with others with a view to making a profit, there is a very high probability you will be operating as a partnership at will which is governed by the provisions of the Partnership Act 1890 (“the Act”).
This is definitely not a good position for any modern-day GP partnership to be in. Although the Act addresses some issues relating to setting up and running a partnership, it has serious limitations:
- it is, in many respects, outdated
- it can have unwanted or unintended consequences
- it is not robust enough to cover some of a modern partnership
- it is not industry specific.
Some of the limitations and/or risks associated with a partnership at will that relies in whole or part on the default provisions of the Act, include:
These issues can lead to lengthy and costly disputes. Please take the time and effort to minimise your risks by formalising your partnership relationships within a written agreement and keep the agreement up to date.
Robert Day is a senior solicitor at BMA Law
If you would like to discuss the issues associated with a partnership at will, or need help drawing up a partnership agreement please contact BMA Law on 0300 123 2014 or e- mail: [email protected]
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If there is no carved partnership agreement, associates are not certified to draw a salary. Instead, they share the incomes and fatalities in the business correspondingly. The agreement outlines the rights, tasks, and obligations each partner has to the business and to each another.
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