Dental Business Agreement

Equal rights in the management of the dental practice may not be desirable, especially when a young dentist joins a partnership with older practitioners. In order to avoid the standard rule of equal treatment, the social contract should specify who is entitled to take which decisions (e.g. B the managing partner or a committee) and to whom this power of decision may be conferred. The agreement may also provide for certain management decisions (e.g. B a certain debt threshold or the leasing of land or equipment) are subject to the approval of the partners. To avoid a blockage, the approval threshold for certain decisions may be unanimous. The termination provisions also give the permanent principal(s) time to raise the money to buy back the outgoing partner and give time to contact patients and providers to maintain business relationships. This provision will be the layout of what each partner is responsible for. A well-developed partnership agreement will help avoid a deadlock. Just as the Partnership Agreement should address the inclusion of new partners, the Agreement should also take into account the withdrawal of existing partners.

Consideration should be given to a partner`s ability to distance itself before a given period of time and to the events that may justify unbundling. The agreement may provide that, where a partner distances itself in breach of the social contract, the partnership partner must pay lump sum damages. For example, when a partner undertakes an act that is likely to have a serious negative impact on the practice at the reasonable discretion of the other partners, the partners may, as part of their written dental partnership agreement, denounce the exclusion of that partner. In the absence of a written dental partnership agreement, the principals would not have the right to expel the partner and, in the absence of an agreement, they would instead have to dissolve the partnership. Dentists should be very careful, because unlike a professional company, a dental partnership can be concluded in the event of an accident. Working together and sharing expenses and profits can be interpreted as a partner of dentists (Corp. Code Section 16202(a)). However, another complexity arises when such a structure is adopted, as it is imperative that the dental partnerships established under the GDS contract be managed separately from the private work of the practice. This is because only the income from a GDS contract is covered by the exception. Carefully crafted partnership agreements can manage expectations, build confidence in the future of the project, and protect both the business and each partner`s investment. An experienced dental partnership lawyer will help you select and verify potential partners.

As has already been said, one of the most important considerations to consider at an early stage when setting up dental partnerships is the value of the practice, so that all parties are aware from the outset of the amount of investment needed. . . .

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