WOULD-BE pharmacy owners are being encouraged to do due diligence before signing a partnership agreement to buy a stake in a pharmacy.
Experts in commercial, contract and employment law from Meridian Lawyers, warned delegates at Pharmacy Connect that pharmacists need to know what they are getting into when entering a partnership.
Commercial lawyer, Georgina Odell, stressed the importance of developing a clear framework outlining how the partnerships between the parties can work.
"When you're buying an interest in a pharmacy you're often presented with a huge bundle of documents, which you read, but you may not understand what they mean," she said.
"What we recommend is before a partnership agreement is drafted that the parties actually sit down together and discuss what they want to go in that partnership agreement.
"It might be the case that you don't know what goes into a partnership agreement or what can or can't go in a pharmacy agreement, so some kind of checklist is really helpful."
Odell said the partnership agreement should cover a broad range of issues surrounding decision-making and the future of business.
"Your partnership agreement is the key governing document of your business and you need to think about what might happen in the future, what might go wrong and how you would want to deal with that," she said.
"One of the first things [to go into a partnership agreement] is what entities are actually going into the partnership - how will decisions be made in the business - is it going to be a simple majority vote, based on the percentage of ownership or are all of the decisions going to be unanimous?
"Usually businesses make decisions on a unanimous basis, but if there are differences you've got a partnership agreement and that should dictate how any votes should be cast."
Odell, said the agreement needed to cover issues around transfer of ownership.
"You don't want to find out your partner has turned up and said, 'I'm selling my interests to X,' and you couldn't do anything about it," she said.
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