DTUK1710

11Practice ManagementJune 28-July 4, 2010United Kingdom Edition departing or deceased partner is selling that partner’s ‘share’ in the overall business to the remaining partners, rather than looking to sell an individual business belonging to that part- ner. Provisions such as the use of life insurance to create funds for use in paying for partnership ‘shares’ released on involuntary departures (such as on death) can be more easily accommo- dated into a partnership struc- ture. The differential between the earnings of individual part- ners from their ‘own’ practices can be more difficult to accom- modate. However, careful draft- ing can be used to place the partners largely in the same position (and the same relative positions amongst themselves) as would be arrived at in an ex- pense sharing arrangement. A partnership will com- plete a Partnership Tax Return, but each partner is individ- ually liable for his or her own tax on the basis of his or her earnings as an individual from the partnership. Limited Liability Partner- ship (LLP) - An LLP operates day to day largely in the same way as an ‘ordinary’ or ‘un- limited’ partnership, but with some differences. The main dif- ference is limited liability. The LLP is a separate legal person from the partners participating in it and the liabilities of the LLP are not therefore the liabili- ties of the constituent partners. Exceptions to this position can arise in the same way as with limited companies. The members of the LLP (who are equivalent to partners in a partnership or directors of a company) have statutory du- ties similar to those of company directors, and also the LLP must file statutory information and ac- counts. This therefore can lead to a limited extent of publica- tion of the earnings and profits of the LLP and of its constituent members. There are different levels of limitation on the report- ing required depending on the turnover of the LLP and until the turnover of the LLP is in several million pounds, the disclosure required is not extensive. An LLP has the same ben- efits in relation to ongoing man- agement and entry and exit as those benefits afforded by a partnership. In the LLP context, those benefits are also increased by the fact that the party which pays the departing member is no longer the other partners but the LLP itself. The partners are therefore in less of a situation of risk amongst themselves as well as to the outside world. The downside may be for the depart- ing partner if the LLP does not have the funds required to pay him or her out. Limited company - Dentists can choose to practice together in a limited company. The ben- efits, and downsides, are similar to those discussed above in the context of the sole practitioner. When more than one dentist is involved in a company, they would usually enter into a Share- holders Agreement taking effect between all the dentists involved, each of whom would usually be both a shareholder and a direc- tor of the company. This would deal with largely the same issues and concerns as those which would be cov- ered in a Partnership or LLP Agreement and avoid the simple majority rule which otherwise obtains within a company from compromising the interests of individuals. That also permits the limited company to provide comparatively straightforward routes to entrance and exit for participants through the sale and purchase of shares. A limited company can also be the best business struc- ture where there is any mixture in ownership or business par- ticipation terms between dental professionals and people who are not dental professionals. A body corporate can conduct a dental practice so long as the majority of its directors are den- tal professionals, and a limited company therefore can provide a medium for diverse forms of dental business. DT About the author Clive Lawrence joined Cohen Cramer in 2009 as a Consultant and is a key member of the firm’s dental team. He advises dentists on a broad range of options in relation to business structures, deal- ing with partnership arrangements, limited liability partnership (LLP) ar- rangements, corporate structures and the numerous connected issues that can arise. To contact Cohen Cramer solicitors, call 0113 2440597, email dental.team@cohencramer.co.uk or visit www.cohencramer.co.uk. clinical governance Clinical Governance is an educational base from which practices can continue pursuing quality insurance initiatives to benefit the practice and its patients. The product also aims to help dental practices become compliant with the NHS clinical government agenda by breaking down each of the seven domains as identified by the Healthcare Commission. Ensure your compliance, call Smile-on now on 020 7400 8989 or email info@smile-on.com or visit www.smile-on.com The Benefits: Completing the programme will: Improve patient experience and patient satisfaction Limit the scope of error in practice Encourage an evidence-based approach to clinical decision making Create a culture of engagement and involvement of all team members Provide a framework to help dentists comply with NHS contractual requirements Since the inception of the New Care Quality Commission it has never been more important to demonstrate that you are compliant with the Clinical Governance requirements. Is your contract secure?