We are often asked by GP practices whether they should enter into a GP Partnership Agreement or a GP Partnership Deed. Some degree of confusion is understandable, since these terms are often used interchangeably when, in fact, they are not the same.
The law is very clear that a Partnership Agreement does not need to be written down. It follows that if you are in a partnership, your relationship will be governed by the terms of a Partnership Agreement. Unless you can demonstrate that you have agreed something else, the terms of the Partnership Agreement will be those which are set out in the 1890 Partnership Act and will be governed by normal contract law.
Additional terms or variations to the default Partnership Act terms can be agreed verbally; by way of a course of conduct; via supporting documents such as meeting minutes, correspondence, accounts etc; and by signing a Partnership Agreement. Since a Partnership Agreement can be made so informally, it can sometimes be a challenge to establish the ‘real’ agreement from a mass of contradictory evidence.
A GP Partnership Deed requires more formality. It must be in writing, and it must make clear that it is intended to be a Deed – normally on the face of the document. A Partnership Deed must also be executed as such, which means that each partner’s signature must be witnessed by an independent person. Finally, the Partnership Deed must be ‘delivered’ which means that the partners need to in some way demonstrate the date from which they intend to be bound.
The contents of a written Partnership Agreement and a Partnership Deed might, to all intents and purposes, read the same, but key differences are:
There are therefore advantages in signing a Partnership Deed rather than a Partnership Agreement, and this is why we advise all our clients to sign a Deed.