Many dentists are realising the benefits of entering into an Expense Sharing Agreement.
This is a type of agreement where expenses such as staff, dental equipment and rent are shared, but those involved don’t share their income or personal assets.
Entering into such an agreement has plenty of benefits, and not all financial.
An Expense Sharing Agreement will provide many of the advantages that a conventional practice partnership offers.
For instance, dentists will be able to interact with other dentists in a professional environment. Therefore they will have the opportunity to discuss any professional ideas or concerns they may have.
But, despite being around other dentists, they will still have the sense of freedom and independence that comes with being sole proprietor of their practice.
There are, however, risks associated with this type of agreement.
An environment with multiple professionals, who each have their own plans and obligations, does not always help the practice to run smoothly.
As a way of avoiding dispute between partners, it is advisable that a formal agreement is drawn up.
Without this agreement a partner can dissolve the partnership at any point without needing to consult their colleague. This can produce further unwanted complications, so it is always a good idea to make sure said agreement is arranged promptly. The agreement will vary from practice to practice; there is no ‘one size fits all’ agreement.
So, it is worthwhile to enlist a specialist dental legal company when it drawing up an Expense Sharing Agreement. Firms like Goodman Legal have a vast experience dealing with the legal concerns of those in the dental industry and provide an expert service.
One aspect which must be detailed in the written agreement will outline conduct in the event of the prolonged absence of a partner. It is important that the agreement compensates for the ill health of those involved. In the event of the death of a partner the Expense Sharing Agreement will need to state what actions should be taken by the remaining partner(s). Details must be made clear of what the new responsibilities of each member are.
The independence of having your own practice but with half the costs cut is a very tempting thought. However, it is absolutely vital that the correct legal agreements are put in place to avoid discrepancies between those involved. This way the practice will run smoothly and successfully for all involved.
Ray Goodman of Goodman Legal – Lawyers for Dentists a NASDAL member