Originally published December 2002 / Reviewed August 2013
The following outlines the CMPA's principles of assistance for members who enter into partnerships with other physicians.
What is a partnership?
The concept of a partnership in law is generally defined as the relation between persons carrying on a business in common with a view to profit. Partners typically enter into a common activity or enterprise, contributing their resources, knowledge or skill with the intention of making a common profit. The concept of a partnership is distinct from that of a sole proprietor, a co-owner, an association, a joint venture, or a corporation.
Variation between provinces/territories
Partnerships are a matter of provincial/territorial jurisdiction. Physicians should therefore be aware of the applicable partnership legislation in their province/territory, and seek the appropriate legal advice when establishing a partnership.
Liability of partners
Unlike a corporation, a partnership is not necessarily considered to have a distinct legal existence from its partners. In most cases, if a partnership is successfully sued and the partnership assets are insufficient, the individual partners may become liable for the debt. For this reason, physicians will want to carefully assess their potential liability for the losses or wrongdoing of the partnership or individual partners when considering the terms of their partnership agreements.
Help from the CMPA
Eligibility for CMPA assistance is discretionary and is considered on a case-by-case basis.
Generally, if one partner is sued by a patient alleging medical negligence, and if the partnership is also named in the action, then the partnership would be eligible for CMPA assistance provided all partners were CMPA members.
The partnership, and thus its individual partners, may be personally vulnerable if the allegations extend beyond the boundaries of medical professional work. In such instances, the partner may not be eligible for assistance, or may be eligible for only limited assistance from the CMPA. Physicians are encouraged to seek independent legal opinion when creating partnership agreements, including advice on the need for specific liability insurance as protection against allegations of a non-medical nature.
To be eligible for CMPA assistance, all of the following conditions must be met:
- All partners must be CMPA members.
- All physicians who do clinical professional work for the partnership must have CMPA membership. Other healthcare providers working at the facility – including employees – who are permitted by law to function as independent self-governing health professionals without direct supervision by a physician will not be granted CMPA assistance; they should have their own adequate professional liability insurance.
- If the partnership has a management company, the management company must be wholly owned by CMPA members, their spouses, children, parents, or siblings, and CMPA members must retain majority control of its decision-making process. Regardless of the CMPA's definition of family member for the purpose of granting assistance to clinics and facilities, members who have a professional corporation must comply with all regulations, legislation and medical regulatory authority (College) requirements in their jurisdiction. The facility owned by the partnership must meet the requirements as outlined in the CMPA's Assistance to clinics and facilities.
- A facility owned by the partnership must not keep a patient overnight for more than one night, whether for investigation, or for observation and supervision following a treatment.