Associate and Partnership Agreements for Doctors

This guide is general information, not legal advice. Contract structures carry tax and labor consequences specific to your situation, so have any agreement drawn up or reviewed by a lawyer.

The three ways to bring on an associate

When a senior doctor takes on a junior one, or two doctors share a clinic, the relationship falls into one of three shapes, and each carries different obligations:

The label doesn't decide it, control does

Calling someone an "independent associate" doesn't make them one. Philippine labor law uses a four-fold test to decide whether an employment relationship exists: who selects and engages the person, who pays them, who can dismiss them, and, the decisive factor, who controls how the work is done. If your "contractor" works fixed hours you set, follows your methods, and can be dismissed like staff, a court may find them an employee regardless of the contract's wording, which brings labor liabilities and mandatory contributions you didn't plan for. So the arrangement on paper needs to match the reality in the clinic.

Why you can't just incorporate your practice

Doctors scaling up often ask about forming a corporation, including the One Person Corporation. Here's the load-bearing rule: under the Revised Corporation Code, a licensed professional cannot organize a corporation, including a One Person Corporation, for the purpose of practicing their profession. You can incorporate an ancillary, non-professional venture, a clinic-management company, an equipment or real-estate holding entity, a products or aesthetics business, but the practice of medicine itself can't be run through an ordinary corporation. The route the law does allow for practicing together is a partnership.

The general professional partnership

Two or more doctors who want to practice jointly can form a general professional partnership, or GPP, registered with the SEC. Its appeal is partly tax: a GPP isn't taxed at the entity level, the partners are taxed individually on their shares of the income, so there's no double layer of tax. A GPP is the clean, permitted vehicle for shared practice, whether that's a group clinic, a call-sharing arrangement, or a formal partnership of specialists. The partnership agreement should spell out profit shares, contributions, decision-making, and what happens when a partner leaves.

Non-compete clauses: reasonable or void

Senior doctors often want a non-compete so a departing associate can't set up next door and take the patients. Philippine law allows such restraints, but only if they're reasonable. A clause limited to a sensible time period, a defined geographic area, and a specific line of practice can hold up; a blanket restraint that effectively stops a doctor from earning a living anywhere is likely to be struck down as against public policy. For physicians there's an added tension, since restricting where a doctor can practice can also limit patients' access to care, which courts weigh. Draft any non-compete narrowly, and expect a broad one to fail.

Setting a fair fee split

The number most associate arrangements turn on is the split, and there's no single correct figure, only a fair one for who brings what. The senior doctor typically provides the clinic, the equipment, the staff, the name, and often the patient flow, while the associate brings their time and their own patients. A split that ignores those contributions breeds resentment on one side or the other. Common structures range from a percentage of the associate's own collections, to a graduated split that improves as the associate builds their own patient base, to a flat rental of space and time where the associate keeps their fees and pays for the use of the clinic. Whatever the shape, write down exactly what each share covers, overhead, staff, supplies, so a "60/40" doesn't quietly mean different things to the two people who agreed to it.

How associates and partnerships tend to go wrong

The failures are predictable, which is good news, because predictable problems can be prevented in the contract. The recurring ones are a split that felt fair at first but doesn't track how contributions actually evolved, ambiguity over who owns the patient records and the clinic name when someone leaves, an associate quietly treated as an employee in everything but title until a labor claim surfaces, and a departure with no agreed process, so shared patients and shared costs become a fight. Every one of these is cheap to settle on paper at the start and expensive to litigate later. The agreement isn't a sign of distrust; it's what lets two doctors work together in trust precisely because the hard questions already have answers.

What every agreement should nail down

Whatever structure you choose, a good agreement settles the predictable friction points in advance: how fees or profits are split, who owns the clinic name and the patient records, who covers overhead and equipment, how a party gives notice and exits, what happens to shared patients on departure, and how disputes get resolved. Most sour associate splits trace back to something obvious that was never written down. An hour with a lawyer at the start is far cheaper than untangling it later.

Frequently asked questions