CDA Essentials 2018 • Volume 5 • Issue 3

S upporting Y our P ractice Advice for new graduates: Should you partner or go solo? David ChongYen Eugene Chu david@dcy.ca e ugene@dcy.ca Is it better start out in a partnership or go it alone? We asked David Chong Yen and Eugene Chu, chartered professional accountants in Toronto who focus their services on dentists, to share their perspectives on partnerships based on some of their clients’ experiences. Here’s an overview of what they said. The minor challenges of a partnership can add up Partnerships can be successful, but also challenging. There is a greater risk that things can go wrong if your goals aren’t aligned. Little annoyances can start to add up, and the more you expect from one another the more difficult it is to operate as a partnership. For example, how do you split the frequent flier miles from the credit cards? How do you allocate new patients? What if a spouse wants to work at the clinic? Establish rules with a partnership agreement Speak with a lawyer and ensure there is a partnership agreement before you enter into a partnership, or ensure there is a shareholders agreement (if the business is incorporated). These legal contracts address how the partners can resolve disputes or unanticipated events like a death, divorce, disability or revocation of license. Learn about “joint and several agreements” If you go into partnership and get financing from a bank, you could be asked to sign a “joint and several agreement.” In practical terms, this means if your partnership borrows a million dollars and you own half of the partnership, the joint and several agreement could result in you being responsible for 100% of the loan because the bank can go after either party, or the party with the most money. Don’t think that because you own only 50% of the partnership that you’re only responsible for 50% of the loans. Consider an alternative to partnership or solo practice One alternative to partnership or solo practice is cost sharing, which is when you benefit from sharing an office and expenses but you have separate patients. The benefit of One alternative to partnership or solo practice is cost sharing, which is when you benefit from sharing an office and expenses but you have separate patients. 33 Issue 3 | 2018 | This interviewhasbeencondensedandedited. Theviewsexpressedarethoseoftheauthors anddonotnecessarilyreflecttheopinions orofficialpoliciesoftheCanadianDental Association.