Exploring ownership structures for your veterinary practice

Choosing the right ownership structure is a key decision when setting up or growing a veterinary practice. Recent Competition and Markets Authority (CMA) reforms also mean practices must think carefully about compliance and transparency from the outset.

This article looks at the main ownership structures available to UK veterinary practices and highlights the practical and legal considerations that should shape your decision.

Sole trader: simplicity and full control

As a sole trader, a vet owns and operates the practice in their own name and is treated as self-employed. This is the simplest structure available, with minimal set-up formalities and ongoing filing requirements.

The sole trader runs the business alone, makes all key decisions, owns the assets, enters into contracts personally and employs staff directly. This structure is often attractive for smaller, single-site practices.

While this business structure offers complete control and flexibility, the main drawback is unlimited personal liability. The owner is personally responsible for all debts and obligations of the business. If the business were to fail while owing money to third parties, creditors can pursue the owner for repayment.

Sole traders don’t need to consider CMA transparency rules relating to multiple practices under one ownership. However, responsibility for complying with the CMA’s detailed operational requirements rests entirely with the owner, along with the potential consequences of non-compliance.

Partnership: shared ownership and shared risk

A partnership arises automatically when two or more people carry out business together with a view to making a profit. It doesn’t require incorporation as a company or limited liability partnership (LLP) and can exist even without a written agreement, making it relatively simple and low cost to establish.

In practice, most veterinary partners put a formal partnership agreement in place. This usually covers profit sharing, decision-making and what happens when partners join, retire or leave.

As with a sole trader, partners have unlimited personal liability and are jointly responsible for the debts of the partnership, including liabilities incurred by other partners. CMA considerations apply in the same way, but partners should clearly allocate responsibility for compliance to reduce the risk of oversight or operational gaps.

Limited liability partnerships: flexibility with protection

An LLP must have at least two members carrying out business with a view to making a profit. Unlike a traditional partnership, an LLP is an incorporated body with its own separate legal identity.

This means members benefit from limited liability and aren’t generally responsible for the LLP’s debts or claims, although they may remain personally liable for their own negligence. LLPs combine the flexibility of a partnership with the protection of a limited company.

LLPs must be registered at Companies House and are required to file annual accounts and a confirmation statement. At least two members must act as designated members, with additional responsibilities including signing and filing the accounts.

Private limited companies: structure, growth and accessibility

A private limited company (PLC) has a separate legal identity from its shareholders and directors. In veterinary practices, it’s common for the shareholders to also act as directors, managing the business day to day.

Shareholders benefit from limited liability, with personal exposure usually limited to the amount paid for their shares. Financial returns typically come through dividends and growth in share value, realised when the company is sold.

There are, however, some drawbacks to operating a veterinary practice through a limited company. Directors are subject to statutory duties and responsibilities under company law, including the duty to promote the success of the company and act in the best interests of its shareholders. These obligations should be considered alongside proposed reforms to the Veterinary Services Act, which may extend regulation to veterinary businesses themselves rather than only individual vets.

This could increase personal exposure for directors, particularly where they don’t have direct control over practice operations. Limited companies also involve greater administrative requirements, including public filing of accounts and confirmation statements at Companies House. The costs associated with this should therefore be considered alongside the benefits when deciding whether this structure is appropriate.

CMA reforms: transparency and compliance requirements

Whatever structure you choose, veterinary businesses operating more than one practice, or a mix of practices and other veterinary services, must now clearly disclose this through signage and branding. The aim is to give clients clear, upfront information about who owns the business.

Compliance will be monitored by the Royal College of Veterinary Surgeons and funded through levies payable per practice, proportionate to business size. Price caps on prescriptions and medicines, and obligations to tell clients where treatment can be sourced more cheaply, are also likely to affect revenues. While larger groups may feel this at scale, smaller practices with tighter margins may experience a proportionately greater impact.

Employee ownership trusts: a succession planning alternative

Employee ownership trusts (EOTs) allow business owners to sell their shares to employees collectively. Employees don’t own shares directly; instead, an independent trustee holds shares on their behalf for the benefit of all eligible staff.

Introduced in 2014, EOTs are supported by tax incentives and are becoming an increasingly popular option for veterinary business owners planning succession. They can allow founders to step back while preserving the practice’s identity and rewarding the team that helped build the business.

Choosing the right structure for your practice

The right ownership structure isn’t just a legal or tax choice. It affects how your practice operates, grows and responds to regulatory change. With CMA reforms increasing the focus on transparency and accountability, it’s more important than ever to ensure your structure supports both compliance and commercial objectives.

Taking early advice and reviewing your arrangements regularly can help keep your practice resilient, competitive and well placed for the future.