Dental Practice Partnership Agreements Explained

A dental practice partnership agreement is the written contract that governs how partners share profits, make decisions, bring in new partners and, eventually, leave. If your practice operates without one, or is relying on a deed drafted before the practice changed shape, you are not protected by “how things have always worked”. You are protected by the Partnership Act 1890, a piece of Victorian legislation that fills the gaps left by any partnership without its own rules, often in ways none of the partners would choose if asked directly.

This is the guide we point dental partners to before they sign, renegotiate, or discover a gap in their existing agreement the hard way. If you are approaching this from the buyer’s side of a practice acquisition rather than as an existing partner, our main guide on how to buy a dental practice covers the wider transaction. This post sits above our more specific posts on associate agreements, restrictive covenants, GDC registration risk and common partnership disputes, each of which goes deeper on one part of this picture.

Why a Written Partnership Agreement Matters More in Dentistry Than in Most Businesses

Dental partnerships carry two layers of exposure that a general trading partnership does not. First, the ordinary commercial risks of any partnership: unlimited personal liability, joint and several responsibility for the practice’s debts, and no statutory mechanism to remove an underperforming or disruptive partner without dissolving the whole arrangement. Second, sector-specific risk: GDC registration status of every partner, CQC registration and the requirement for a registered manager, and, for NHS practices, the General Dental Services (GDS) or Personal Dental Services (PDS) contract that the practice’s income depends on.

Courts have also confirmed that dental practice owners carry a non-delegable duty of care to patients that cannot be shifted onto an associate simply because the associate is nominally self-employed. In Breakingbury v Croad, a first-instance judgment handed down at Cardiff County Court in April 2021, the court held that a practice owner remained liable for the negligence of an associate dentist working under her, on the basis that patients are patients of the practice and the duty of care to them cannot be delegated away. Whatever your internal profit-sharing arrangement, the outside world, and the courts, will generally treat the partnership as one entity responsible for the care it delivers. Getting the internal agreement right is what determines how that exposure is shared, insured against and managed between partners, not whether it exists.

What Happens Without One: The Partnership Act 1890 Default Position

If two or more dentists run a practice together, sharing profits, without a partnership agreement, or with one that is silent on a particular point, the Partnership Act 1890 fills the gap automatically. It was not written with modern professional practices in mind, and its defaults create real problems for a dental partnership specifically:

None of these defaults can be relied on to produce a sensible outcome for a dental practice, and several of them (automatic dissolution on death or bankruptcy in particular) can put the NHS contract itself at risk if not addressed contractually in advance. We see the same underlying pattern recur across GP surgeries, dental practices, and occasionally opticians: a group of professionals starts working together informally, assumes a “gentleman’s agreement” is enough, and only discovers the Partnership Act 1890 defaults apply when a relationship breaks down.

The Core Terms Every Dental Partnership Agreement Should Cover

A properly drafted agreement displaces the 1890 Act defaults and replaces them with terms fitted to how your practice actually operates. At minimum, it should address:

• Capital and profit share. How much capital each partner has contributed, how profits and losses are divided (equal shares are rarely appropriate once contributions differ), and how drawings are managed.
• Decision-making and voting. Which decisions need unanimous partner agreement (taking on debt, admitting a new partner, changing the NHS contract) and which can be made by a majority or by the managing partner alone.
• Roles and time commitment. Clinical sessions expected, administrative and management responsibilities, and what happens if a partner wants to reduce hours.
• Absence and incapacity. Sick leave, maternity and paternity leave, and long-term incapacity provisions. Without express terms, a partner on long-term sick leave may still be entitled to an equal profit share indefinitely under the 1890 Act default, which can put real strain on the partners still working.
• GDC and CQC compliance. A requirement that every partner remains GDC-registered throughout, and clarity on who holds CQC registration and who is (or will become) the CQC registered manager. See our dedicated post on GDC registration risk in dental partnerships for why this matters more than most partners realise.
• Restrictive covenants. Non-compete and non-solicitation terms that apply if a partner leaves, drafted narrowly enough to be enforceable. Covered in full in our post on restrictive covenant enforceability, which applies the same underlying legal test to partners as to associates.
• Admission of new partners and buy-ins. The process, valuation method, and funding arrangements for bringing in a new partner, whether an existing associate or an external buyer.
• Retirement and exit. Notice periods, valuation of the departing partner’s share (goodwill, work in progress, fixtures and fittings), and payment terms, ideally staged rather than a single lump sum that could destabilise the practice’s finances.
• Death and incapacity provisions. Continuation clauses that prevent automatic dissolution, plus how a deceased or incapacitated partner’s estate or successor is bought out.
• Dispute resolution. A mandatory mediation or expert determination step before litigation, and, ideally, a deadlock-breaking mechanism for decisions the partners cannot agree.
• Property and premises. Whether the practice premises are owned by the partnership, by one or more partners personally, or leased, and how rent or property income is treated within the partnership accounts.

Buying Into an Existing Practice: Where This Agreement Sits

If you are joining an established practice as a new partner, the partnership agreement is the document that defines what you are actually buying into, not just the practice’s clinical reputation. Before committing, you should understand the profit-sharing formula you will join, what capital contribution or buy-in payment is expected, what restrictive covenants will bind you if you later leave, and what exit terms will apply to you in turn. We cover the specific mechanics of buy-ins, including typical valuation approaches and staged payment structures, in our post on dental practice buy-ins.

Associates, Partners and the Line Between Them

Many dental partnerships begin life as an associate relationship that evolves into a partnership offer once trust is established. It is worth being precise about the distinction, because the legal position is very different. An associate dentist is typically engaged under a self-employed associate agreement, is not a co-owner of the business, and has no exposure to the practice’s debts or liabilities. A partner is a co-owner, shares in the practice’s profits and losses, and carries unlimited personal liability for the partnership’s obligations, including obligations arising from other partners’ conduct within the business.

If you are currently an associate weighing up a partnership offer, or a practice owner drafting an associate agreement with a future partnership route built in, our post on dental associate agreement key terms covers what to check before signing at the associate stage, before the partnership question even arises.

When Partnerships Go Wrong

Even a well-drafted agreement will not prevent every disagreement, but it determines how a disagreement is resolved rather than whether one becomes an existential threat to the practice. The most common flashpoints we see are disputes over profit share following a change in a partner’s clinical output, disagreement over admitting or excluding a partner, breakdown in trust following a partner’s conduct, and disputes on exit over how goodwill and the NHS contract value should be calculated. We cover the recurring patterns, and how a well-drafted agreement heads them off, in our post on common dental practice disputes and how to prevent them.

What This Means for You

Whether you are setting up a new dental partnership, reviewing a deed that has not been updated since the practice looked very different, or being asked to buy into an existing one, the partnership agreement is the single most important document governing your financial and professional exposure. It is worth getting right before you sign, not after a dispute forces you to read it closely for the first time.

We act for dental partnerships across England on drafting, reviewing and renegotiating partnership agreements, and for individual partners taking independent advice before committing to one. If you would like to talk through your practice’s current arrangement, get in touch with our dental practice team or call us on +44 207 566 1188, or email info@gurvelegal.com.