Graham Hutton highlights the importance of an up-to-date partnership agreement when transitioning from NHS to private or mixed dental practice.
For many dentists, the move from NHS to private practice is a significant professional milestone. It can bring greater autonomy and more control over your working life, but with that freedom comes new responsibilities – particularly when it comes to the legal framework that governs how your practice operates.
A well-drafted partnership agreement is vital in any practice. But if your business is transitioning from an NHS-based model to a private or mixed practice, reviewing and updating your agreement becomes a necessity. Without review, your agreement may leave your practice exposed to financial risk, operational disputes or compliance issues.
Understanding partnership agreements
Put simply, a partnership agreement is the rulebook for how your practice operates. It acts as a formal contract between partners, setting out key terms such as:
- How partners are paid
- What happens during periods of illness or annual leave
- How disputes are resolved
- How additional income is managed
- The process for partners joining or leaving the business.
As your business model evolves (for example, moving away from NHS contracts), your ‘rulebook’ may need to reflect new income streams, fee structures and patient care arrangements.
Why a partnership agreement matters
Without a clear, up-to-date agreement, your practice could face a number of legal and financial risks. If a formal agreement is absent, your partnership will automatically be governed by the 1890 Partnership Act. This law will also fill any gaps in an existing agreement.
While still legally valid, the 1890 Act doesn’t reflect the complexities of modern dental practices. For instance, under the act, a partnership can only be dissolved by the death or bankruptcy of a partner. This means that if a partner takes long-term sick leave, they may still receive their share of the profits indefinitely – creating serious financial strain for the remaining partners.
A tailored partnership agreement ensures your business isn’t bound by outdated legislation and remains protected if unforeseen circumstances arise.
What a good agreement includes
A strong partnership agreement should be tailored to the structure, goals and operations of your practice. Typically, areas covered include:
- Basic details – names of partners, practice name and address, business type and start date
- Financial contributions – capital input, ownership shares and future funding arrangements
- Roles and responsibilities – clinical, administrative and management duties
- Working arrangements – hours, annual leave, sick leave and long-term absence policies
- Premises – ownership or lease terms and maintenance responsibilities
- Joining or leaving – processes for new or retiring partners, including notice periods
- Conflict resolution – agreed methods for handling disputes
- Insurance – such as indemnity, partnership protection or malpractice cover
- Succession and legacy planning – what happens to a partner’s share of the practice in the event of death or serious illness.
If your practice is transitioning to private dentistry, you may also need to update clauses around fee distribution, goodwill valuation or patient refunds – areas that are less relevant under an NHS contract, but crucial in private practice.
It’s also wise to have your agreement reviewed by a solicitor. This is to ensure that the legal language used accurately reflects your intentions and that all involved parties are protected.
Due diligence for new partners
If you’re joining an existing partnership, take time to review the agreement carefully. This will help you to understand your responsibilities, income structure and any long-term financial implications. Remember, as a partner you’re a co-owner – not an employee. This means your rights are determined by the partnership agreement rather than employment law.
As such, be sure to ask questions about holiday entitlement, sick leave, CPD allowances, maternity or paternity leave and retirement provisions. Clarity now will help avoid misunderstandings later.
Keeping agreements up to date
A partnership agreement should be treated as a living document, reviewed regularly and updated when circumstances change – such as a move away from providing NHS services or the introduction of private treatment plans.
Regular reviews ensure your agreement stays relevant, keep your practice compliant and protect your financial interests. When properly maintained, it supports smooth operations and enables confident, informed decision-making for all partners.
Navigating your partnership agreement
Whether you’re fully private or still offering NHS services, understanding the fine print of your agreement is key to safeguarding your interests and ensuring the long-term success of your practice. At Wesleyan Financial Services, our specialists can help you interpret your agreement and plan confidently for the future.
To book a conversation with a dental specialist financial adviser from Wesleyan Financial Services, visit wesleyan.co.uk/dental or call 0808 149 9416.
Please note: Charges may apply. You will not be charged until you have agreed to the services you require and the associated costs. Learn more at www.wesleyan.co.uk/charges.
This article is sponsored by Wesleyan Financial Services.
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