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Physician Contract Glossary · Ownership & Partnership

Buy-Sell Agreement

A buy-sell agreement governs how an owner's stake is bought or sold when they join, leave, retire, become disabled, or die.

A buy-sell agreement is the rulebook for ownership transitions in a practice: how a new partner buys in, how a departing partner is bought out, and what happens on death, disability, or retirement. It sets the valuation method and the payment terms on both sides. It is the single most important document for any physician considering partnership, because it defines both the cost of getting in and the value of getting out.

WHAT TO WATCH FOR

Read the buy-sell before you buy in, paying special attention to how a departing owner is valued and paid. A favorable buy-in paired with a punishing buy-out formula can trap your capital in the practice.

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