Keep It Legal: Partnership agreements.
Face the consequences – possibly losing everything – if you don’t have an LLP agreement. Justin Cumberlege explains why one is essential.
A doctor’s assets – including their house – can be at risk if a claim is made against them. Some risks are not covered by insurance.
For example, if you fall ill, you may not have enough insurance cover to pay for the rent and other outgoings for the consulting rooms.
Those losses would be the personal, uninsurable, liability of the doctor’s. A contract may seem innocuous, until things go wrong and a claim for the provision of services may include not only financial loss, but damage to reputation.
One way of protecting personal assets is to incorporate and by forming a limited liability partnership (LLP), if you can do so. Medical accountants may also recommend LLPs to gain some tax advantages.
What is often overlooked is having a partnership agreement. This comes into sharp focus when the doctors in partnership have a dispute. Expelling a partner is not going to be done using the force of law, as there is no law to assist in normal circumstances.
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