The importance of an up-to-date GP partnership agreement

Having a signed GP partnership agreement is vital. Make sure yours covers everything it needs to and learn the dangers of not having one in our guidance.

A partnership agreement identifies the obligations, responsibilities and restrictions of partners at a practice.

Your partnership agreement is undoubtedly the most important document that should be provided to any incoming partner, as they will be required to sign up to it.

We strongly recommend that you document the working relationship between all partners. By doing so, you will significantly reduce the risk of potential partnership disputes.

What a new agreement should cover

Probationary periods

• It is not essential, but is common practice for a new partner to have a probationary period.
• If you need to, either side can terminate the appointment on short notice (usually one month).

Working commitment and profit share

• Document what commitments you expect of your partner, including out-of-hours.
• Confirm what they will receive in return in terms of a profit share. Will they achieve full parity immediately, or over time?

Capital contributions

Introducing a period over which the required contribution is paid, and/or indicating that such contribution can be taken from undrawn profits is a great way of softening the requirement to introduce capital.

Ring-fenced liabilities

Existing partners taking the responsibility of historic liabilities is a good way to attract new partners. This could include historic dilapidations in leases premises or cost rent overpayment liabilities.

Premises

It’s important to revisit your practice premises arrangements.

If the premises you operate from are leased, consider whether the new partner will be expected to become a named party to the same, and if so, how is this achieved under the terms of your lease?

If the premises are owned as a partnership asset or by the partners, consider whether the new partner will be expected to buy in. If so:

• Who will they acquire the interest from?
• When will they be expected to complete the ‘buy in’?
• How will the value be ascertained? Will independent surveyors be used?
• Is there a defined means of valuation in the existing partnership agreement?

General update

In terms of more general changes in the general practice, you should consider whether your agreement covers:

• the need to expressly provide for the possibility of taking 24-hour retirement for pensions purposes
• the possibility of the practice being involved in a primary care network
• the need to create even greater protection against partners leaving which could result in a 'last person standing' situation
• put clear decision-making and management rules
• annual leave, parental leave, sick leave (including non-clinical partners) and study leave.

BMA members can enjoy a discounted rate for:

• partnership drafting and variations to existing partnership agreements
• appointment/retirement of partners
• partnership disputes.