Navigating GP Practice Financial Structures: Partnerships, Limited Companies, and LLPs

Welcome to the Medic’s Money podcast blog! In this post, we’re summarizing a recent episode featuring host Cyra,  and medical specialist accountant Andy Pow, where they discuss different financial setups for GP practices, including partnerships, limited companies, and LLPs.

Types of GP Practice Structures

GP practices are commonly organized as sole proprietorships or partnerships. Partnerships involve multiple GPs working together and carrying unlimited liability, meaning partners are personally responsible for any business debts.

Emergence of Limited Companies

Limited companies are becoming an increasingly popular structure for GP practices, offering limited liability but requiring a rigorous process to transfer GP contracts. This setup may involve substantial initial and ongoing legal costs.

Advantages and Flexibility of Partnerships

Partnerships allow flexible profit-sharing and easy adaptation to changes like retirements or new joiners without extensive paperwork. This flexibility suits the dynamic nature of GP work schedules.

Challenges with Limited Companies

While offering risk management benefits, converting to a limited company can increase tax obligations and require detailed adjustments in banking and premises management.

Understanding LLPs

Limited Liability Partnerships (LLPs) blend the flexibility of partnerships with limited liability features. However, in England and Wales, GP contracts can’t currently be held by LLPs.

Key Considerations and Future Prospects

As GP practices expand and handle more diverse contracts, LLPs might offer a balance of risk management and financial flexibility, though legislative changes are necessary. Practices must weigh financial implications and long-term goals when choosing a structure.

Conclusion

Selecting a suitable structure requires a tailored approach based on each practice’s unique needs. Professional guidance is crucial to ensure the chosen structure supports both short and long-term objectives. We encourage questions and thoughts, which can be directed to our expert guest, Andy Pow, to further understand these options.