GP partnerships and mergers

Without a valid and up to date partnership agreement, the departure of a partner could trigger the termination of your GMS/PMS contract and the end of your business. An ‘off the shelf’ partnership deed is unlikely to provide sufficient protection for GP partners and their practice as it will not consider the regulations or the NHS environment. Areas like rent reimbursement, the SFE, primary care networks etc. are all so industry specific, that ‘ordinary’ partnership deeds will simply not cater for them. Our GP partnership deeds encapsulate our unrivalled understanding of primary care and constantly evolve as the regulations change, so you can be confident of the highest levels of protection and the most comprehensive drafting.

Download our free guide to see if your partnership deed needs an update

These terms are often used interchangeably when in fact they are not the same.

A ‘partnership agreement’  does not need to be written down.  Although you may sign a partnership agreement, it can be open to challenge and uncertainty in the future because ‘agreements’ can be given and varied verbally, by way of conduct or via supporting documents such as meeting minutes & emails.

A partnership deed is more robust and reliable. A deed must be signed, witnessed and ‘delivered’  and can then can only be varied in ways the parties intended (usually by another deed) so its terms are less likely to be contested. A deed also has a longer limitation period for enforcement than an agreement – generally 12 years rather than 6 years. For these reasons we would generally advise all clients to enter into a partnership deed rather than a partnership agreement.

Whether you are moving on to pastures new or ready to retire from practice, it is important that your exit from the partnership is controlled and managed to avoid disruption to patient services and to reduce the risk of liability occurring in the future. A few of the key matters to be dealt with include:-

• your NHS contract
• the surgery premises
• other valuable assets, such as shares in a GP federation, PCN or pharmacy
• the partnership accounts
• housekeeping to reduce future liability

You can read more here or download our free guide

A partnership with no partnership deed or agreement in place is known as a partnership at will and is governed by the Partnership Act 1890. Unsurprisingly, the 1890 Act is not a good rulebook for governing a modern GP partnership. Did you know that operating as a ‘partnership at will’ means that:

• all profits and losses are divided between the partners in equal shares
• all decisions are made by a simple majority of the partners
• there are no provisions for absence or leave
• a partner cannot be expelled so in the event of a dispute arising, the only option may be dissolution with the risk of losing your NHS contract
• if any partner retires, dies or is made bankrupt, the partnership will automatically dissolve with the same risk to your NHS contract

The costs of keeping a partnership deed up to date are very small compared to the costs and stress associated with a dispute arising in a partnership at will.

With the continuing trend of ‘working at scale’ and the ongoing difficulty in recruiting GP partners, many practices are looking at merging as a way of future-proofing their business. We have acted on many GP practice mergers and there are a number of potential benefits in doing so. However for a merger to be successful and for the full range of benefits to be secured, certain legal and regulatory steps need to be carried out.  You can read more about GP practice mergers in our blog or download our free step-by-step guide to ensure you are prepared.