Ideally, when you put together a dental partnership, you include the terms for what you needed to do later, if one or both of you wanted out of the partnership agreement. Unfortunately, that's not always the case, which means that you might need help to figure out how to effectively dissolve your partnership in a way that works for both of you. Whether you have a contract that clearly sets out how you need to go about dissolving your dental partnership or you're not sure where to start with the dissolution, there are several steps to follow.
Why Can You Dissolve Your Partnership?
Your dental partnership isn't ironclad. If the arrangement isn't working out for you or for any of your partners, you have the option to dissolve the partnership. You may choose to dissolve the partnership because:
- You have too many patients for your existing space;
- One of the partners has been involved in illegal activity;
- You want to change loans to one that isn't supported by your current practice or patient base;
- One of the partners is retiring or choosing not to practice dentistry any longer;
- Your practice is merging with another, larger practice; or
- Your practice is struggling financially, and you'd rather work on your own.
One partner leaving the dental partnership does not necessarily mean that the practice can't continue. In fact, in many cases, the other partners will continue to hold on to the practice.
Step One: Talk to Your Partners
If you're ready to dissolve your dental partnership, the first step is to talk with your partners. You'll need to refer back to your practice agreement: what does it say about the separation? You should discuss details like:
Do other partners want to keep the business? If you want out of the partnership, you're probably joining another group or going out on your own. The other partners, on the other hand, may want to maintain their partnership and keep the business running.
How do you want to handle any outstanding debts belonging to the practice? If there are debts that are unpaid, how will they be divided among you? If you can come to an equitable arrangement, it's easier than if you end up fighting over the issue.
How are you going to handle your clients? Do you get to keep the clients that belong to you personally, or will you be leaving them with the practice?
Is everyone in agreement about the dissolution of the partnership? You may end up needing to put the partnership dissolution to a vote, especially if some of your partners disagree.
If you and your partners are unable to come to an equitable agreement, you may need an experienced dental attorney to help act as a go-between. A dental attorney can help you work through all the details of dissolving your partnership and ensure that everyone's treatment is fair.
Step Two: Handle the Financial Details
If your practice has outstanding debts, you and your partners will need to figure out how you want to handle them. If some of the partners are staying with the practice, they may take on the majority of the debts as part of the practice. On the other hand, if all of you are leaving the partnership, the debts may be shared between you.
You'll also need to handle the distribution of assets that belong to the practice: the property, any funds that belong to the practice, and equipment. Your partnership agreement may set out some of the details of distributing assets, or you may need to make these decisions with your partners.
Step Three: Notify Your Team
Office team members will need to be informed early in the process that you're planning to dissolve the partnership. Let them know what the plan is. If you'll be opening a new practice, you may give them an offer to come work for you. On the other hand, if the practice will continue without you, you may not want to take any of the employees with you. Notify your team about the upcoming dissolution. Provide them with key details like when the change will take place, whether or not their employment will be impacted, and what they can expect.
Step Four: Spread the Word
Dissolving your dental partnership will impact your patients most, which means they should be notified as soon as possible. You will also need to notify any local businesses that you partner with, your suppliers, and others who have an interest in your dental practice. Make sure to notify all relevant individuals at least a month before the final dissolution of your partnership so that they can make any relevant decisions. Remember to keep it professional: even if you have personal reasons for wanting to end your partnership, you'll need to issue a professional statement to your patients and associates. Make sure that you give patients important information: a new dentist that you would recommend, whether or not the practice will continue, and what each partner is planning to do in the future.
If you're considering dissolving your dental partnership, you may need legal help to ensure that all of your interests are met and that you've taken care of all of the key details. Contact us to learn more about how we can help you move through the process. Just drawing up your partnership agreement? We can help ensure that you don't miss any important details that will make the partnership's potential dissolution easier on everyone involved.