If your GP practice does not have a signed partnership agreement, you are operating as a partnership at will under the Partnership Act 1890. This means any partner can dissolve the entire partnership simply by giving notice, with no defined process, no agreed valuation for departing partners, and no protection against the practice unravelling faster than anyone intended.
Partnership at will is not a deliberate choice most GP partnerships make. It is what happens by default when partners never got round to signing an agreement, or when an agreement was signed years ago and has quietly become out of date as the partnership’s membership changed around it. Either way, the legal consequences are the same, and they are more serious than most partners realise until something goes wrong.
How a GP Partnership Ends Up “At Will”
Under section 1 of the Partnership Act 1890, a partnership exists wherever two or more people carry on a business together with a view to profit, regardless of whether they have signed anything to say so. Where partners have not agreed a fixed term or a defined process for how the partnership operates, section 26 provides that any partner may determine the partnership at any time simply by giving notice to the others. This is what “partnership at will” means: a partnership with no fixed term and no contractual mechanism overriding the Act’s default position.
Many GP partnerships end up here without ever intending to. A practice might have had a partnership agreement drafted twenty years ago that was never updated as partners retired and new ones joined, meaning the surviving document no longer reflects who the actual partners are or what they agreed. Technically, once the original signatories have all left, a partnership at will can arise again by default even if a deed once existed, unless the practice has been careful to have each new partner formally adopt the existing agreement or sign a fresh one.
What You Are Exposed to Without a Deed
The Partnership Act 1890 was written for Victorian trading partnerships, not for a modern GP practice holding an NHS contract, employing dozens of staff and managing a CQC-regulated premises. Its default rules create several specific exposures for a GP partnership operating without its own agreement.
| Risk | Why it matters for a GP practice |
|---|---|
| Any partner can dissolve the whole partnership on notice (s.26) | A single disgruntled partner can trigger the end of the entire practice, not just their own exit, with no minimum notice period fixed by the Act itself |
| No expulsion mechanism | There is no lawful way to remove a partner for poor conduct, incapacity or breakdown in the working relationship, however serious |
| Equal profit share regardless of contribution | Partners who work fewer sessions or contributed less capital are still entitled to an equal share under the Act’s default position |
| No probationary period for new partners | There is no lawful short-notice exit route if a new partner does not work out |
| Automatic dissolution on death or bankruptcy (s.33) | The partnership technically ends, creating uncertainty for the practice’s contract, staff and premises at the worst possible moment |
| No agreed valuation mechanism for a departing partner’s share | Disputes over what a leaving partner is owed have no contractual framework to resolve them, often ending in costly litigation |
The “Last Person Standing” Problem
One of the most serious consequences of operating as a partnership at will is what practitioners often call the “last person standing” problem. If partners retire or leave in succession without the partnership recruiting replacements at the same pace, and there is no partnership agreement fixing a minimum gap between permitted retirements or a mechanism to manage this risk, a practice can find itself down to one or two remaining partners faster than anyone anticipated, with all of the practice’s liabilities, from property obligations to staff employment liabilities, concentrated on fewer and fewer shoulders. This dynamic can also make remaining partners behave defensively, which in turn accelerates the departures it is trying to avoid. A well-drafted partnership agreement, of the kind we draft through our partnership agreements service, addresses this directly, for example by requiring a minimum interval between planned retirements or maintaining a fund to cover lease dilapidations and other unfunded liabilities. We cover how to resolve a breakdown that has already reached this point, including through formal dispute resolution, in Resolving a GP Partnership Dispute: Your Legal Options.
What Happens to Your NHS Contract
A common misconception is that dissolving the partnership automatically ends the practice’s GMS contract. That is not quite right, but the actual position under the National Health Service (General Medical Services Contracts) Regulations 2015 is arguably more precarious, not less. A GMS contract held by a partnership continues with the partnership “as from time to time constituted”, meaning ordinary changes in membership, a partner joining or retiring, do not by themselves end the contract. But Schedule 3, paragraph 59 of the 2015 Regulations sets out a strict process for what happens if the partnership terminates or dissolves down to a single remaining partner: that partner can only continue holding the contract if they are formally nominated in writing, signed by every partner, at least 28 days before the change of status, and only if they are a qualifying medical practitioner.
Where a two-person partnership dissolves because one partner has died, the surviving partner must notify the Integrated Care Board as soon as reasonably practicable. If the survivor is a general medical practitioner, the contract continues with them. If they are not, the Board can only agree to the contract continuing for a maximum interim period of six months while a replacement medical practitioner is found, and if that does not happen in time, the Board must terminate the contract. In other words, a poorly managed dissolution does not just create an internal partnership dispute. It can put the practice’s entire NHS contract, and by extension its income and its patients’ continuity of care, at genuine risk within a matter of months.
CQC Registration Complications
Where a practice is CQC-registered as a partnership, the names of the partners form part of the conditions of that registration, and Regulation 15 of the Care Quality Commission (Registration) Regulations 2009 requires the registered person to notify the CQC in writing, as soon as reasonably practicable, of any change in the partnership’s membership. A disorderly dissolution triggered by a partner giving notice under the Act’s default rules leaves a practice scrambling to manage this notification alongside the NHS contract issue and the practical business of keeping the surgery running, rather than working through a planned, agreed process.
The Fix Is Straightforward
None of these risks are unusual or complicated to solve. A properly drafted partnership agreement displaces the Partnership Act 1890’s default rules and replaces them with terms suited to a modern GP practice: a fixed process and notice period for a partner leaving, expulsion provisions for serious breakdowns, an agreed profit-sharing formula, and a defined valuation mechanism for a departing partner’s share. We set out everything a modern partnership agreement should cover in GP Partnership Agreements: What Every Partner Should Know, and if your existing agreement is showing its age rather than genuinely missing, 8 Signs Your GP Partnership Deed Needs Updating is a useful next read.
What This Means for Your Practice
If you are not certain whether your practice has a valid, up-to-date partnership agreement in place, or you know you are relying on the Partnership Act 1890 by default, this is worth resolving before a partner change forces the issue on someone else’s timetable. We draft and review GP partnership agreements for practices across London and the South East, acting for both individual partners and practices as a whole. If this affects your practice and you would like to talk it through, get in touch with our healthcare team or call us on +44 207 566 1188. You can also reach us by email at info@gurvelegal.com.
