About the Buy-in

September 1, 2005

What is usually done with the remainder of the "buy-in" if a physician leaves a group before paying the full amount?

Question: What is usually done with the remainder of the "buy-in" if a physician leaves a group before paying the full amount?

Answer: Deciding what to do with the remainder of a buy-in is a business decision for the partners. Some groups would use it to pay for a piece of equipment, a computer system, or another capital expense. Others would simply use it as additional income to be distributed to the partners. Finally, others would retain it, and use it as retained earnings for the future. We'd recommend that you check with your accountant to see if he has any suggestions about using it (as he would know the particulars of your group, the financial situation of your group, and the tax consequences of the decision).