All this folderol on treaties is important, but lately a treaty is as good as the willingness of the parties concerned to follow it. Ownership of real estate can become a divisive subject. For example, senior partners sometimes own the building used by the practice and rent spaces for practice. Make sure you receive copies of the relevant lease agreements. If senior partners ask for excessive rent, junior partners will likely feel unfairly treated. It is now time to put such issues on the table for discussion. Make sure you understand the type of participation they will have in practice. The governance structure and decision-making power are usually defined in the shareholders` agreement, but the particularities may be covered by the articles of association of the company or the enterprise agreement of an LLC. Make sure you read and understand each of these documents. Sansweet explains that details of the income allocation formula and expense allocation may not be included in the shareholders` agreement itself. “These problems need to be addressed, but the form in which it is varies,” he says. “It could be a link to the employment contract or a separate remuneration agreement. Sometimes it`s just an expression of the office manager or the firm accountant and is not even formally incorporated into an agreement. “Remember that as an equity shareholder, you are also responsible for buying a partner`s share that leaves the group.” Buyout is a big deal,” Sansweet notes, “especially when someone enters an office or shops at a practice where some of the other doctors are about to retire.
The buyback structure is very important. Typically, there is what is called a “Buy-Sell Force”. If someone leaves for any reason – retirement, death, moving to another state – the remaining shareholders have the obligation to buy that doctor. The redemption is usually paid over time and, for tax reasons, part of this remuneration is usually structured as payment of shares and part as deferred remuneration. “Another issue that concerns many lawyers, practice management advisors and oncologists is the use of family members as practice agents. . . .