GUIDE · MEDICAL PRACTICES
A plain guide to the order that usually works: who does each part, what to check first, and what tends to go wrong. About a six-minute read.
IN THIS GUIDE
General information, not advice. Your lawyer, accountant and adviser advise on your situation.
THE SHORT ANSWER
Most partner exits go wrong in the gaps between professionals, not inside anyone's work. Each step below depends on the one before it.
Get the order right and each professional's work holds. Get it wrong and someone ends up redoing theirs.
Read the agreements
LawyerValue the share
Valuer · AccountantWork out the tax, then agree the price
Accountant · LawyerLine up the loan and the guarantee release
Bank · Landlord · LawyerSign, then tell staff and patients
Lawyer · Practice managerWHO DOES WHAT
Your professionals give the advice. The hard part is making sure their work happens in the right order, and that each one knows what the others have decided.
STEP 1
Before anyone talks price, find every signed agreement: the partnership or shareholder agreement, any buy-sell agreement, the lease and the loan documents. Ask your lawyer to check what they say about:
Many practices have more than one entity, for example one that runs the practice and one that owns the building. Each can treat a leaving partner differently. If an agreement is silent, or says "to be agreed", ask your lawyer before you go further.
STEP 2 AND 3
A price agreed early feels like progress. But what the price means for each partner changes once the accountant works out the tax.
Get the share valued. Let the accountant work out the tax for both sides. Then agree the price, in writing. Doing it the other way round is one of the most common reasons a deal has to be redrafted.
A price agreed before the tax is known is a guess.
STEP 4
If the leaving partner signed a personal guarantee for the lease or the practice loan, it stays in place after they leave. The landlord and the bank have to agree to release it, usually in writing.
They often won't do that until the buyer's finance is approved. So raise it early, and line it up so the release happens at settlement, not months after.
STEP 5
Patients don't belong to one doctor, and who holds the records depends on how the practice is set up. Your lawyers confirm that.
Agree how staff and patients are told, when, and by whom. Keep it quiet until it's signed, so nobody hears it in the corridor first.
A FICTIONAL EXAMPLE
The work is the same.
Only the order changes.
Dr Anne is retiring from a three-partner GP practice. Dr Raj, one of the other partners, is buying her share.
OUT OF ORDER
The partners agree a price over coffee.
The accountant works out Anne's tax. She'll take home far less than she thought. The price is reopened.
Raj's bank values the share below the agreed price and cuts his loan.
Anne finds she's still on the lease guarantee. The landlord won't release her until Raj's finance is approved.
Settlement five months later than planned. Two rounds of redrafting.
IN ORDER
The lawyer reads the agreements. They say the partners choose a valuer together.
The share is valued. The accountant works out the tax for both of them.
The price is agreed on real numbers, in writing.
Raj applies for his loan on the valuation. The landlord is asked about releasing Anne.
Contracts are ready, with Anne's guarantee release lined up for settlement.
Ready to sign at week 12. Each professional did their part once.
A fictional example. Names and details are made up.
BEYOND THE PRACTICE
A partner leaving often reaches home, for the one leaving and the one buying in. Flag these early so your adviser, accountant and lawyer can sort them at the right time.
PARTNER LEAVING
Flag it early. Decide when.
THE CHECKLIST
Print it, tick it, or send it to your accountant and lawyer so everyone works from the same list.
Download the checklist (PDF)WHEN YOU'RE READY
Twelve weeks, one fixed fee, your professionals stay. See the steps, week by week.
Bringing in or buying out a partnerNot sure if you need us?
You'll leave with a clear view of what needs to happen, and in what order. If your accountant can handle it, we'll say so.
Arrange a walkthroughClients across Australia. Most walkthroughs are by video.
WHAT HAPPENS IN A WALKTHROUGH
Your situation, in your words, and who's already involved.
What needs to happen, who does it, and in what order.
Whether to go further with us, or carry it on yourself.
FOR ACCOUNTANTS, ADVISERS AND BANKERS
We don't replace you. We make sure your work connects to everything else happening around your client. Your client stays your client.
How we work with professionals
