MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(State of Georgia)

[// GUIDANCE: This template is drafted for a physician-owned partnership conducting the practice of medicine exclusively within the State of Georgia. It presumes that ALL equity holders are duly licensed physicians in good standing. Confirm compliance with the Georgia Medical Practice Act, Georgia Composite Medical Board (“GCMB”) regulations, and federal fraud-and-abuse rules (e.g., Stark, Anti-Kickback) prior to execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Formation; Purpose; Term
4. Capital Contributions; Ownership; Allocations
5. Management and Voting
6. Compensation; Distributions; Fee-Splitting Compliance
7. Books, Records, and Accounting
8. Representations and Warranties
9. Covenants and Restrictions
10. Insurance Requirements
11. Default; Notice; Remedies
12. Indemnification; Limitation of Liability
13. Dissociation; Buy-Out; Dissolution
14. Dispute Resolution
15. General Provisions
16. Execution Block

Exhibits & Schedules
• Schedule 1 – Initial Capital Contributions & Percentage Interests
• Exhibit A – Form of Covenant Not To Compete / Non-Solicitation
• Exhibit B – Arbitration Agreement
• Exhibit C – Formula Buy-Sell Provisions

1. DOCUMENT HEADER

1.1 Agreement Title. MEDICAL PRACTICE PARTNERSHIP AGREEMENT (this “Agreement”).

1.2 Parties.
(a) [PARTNER A NAME], M.D., Georgia medical license no. [_], having a principal address at [_] (“Partner A”);
(b) [PARTNER B NAME], M.D., Georgia medical license no. [_], having a principal address at [_] (“Partner B”);
(collectively with any additional partners admitted under Section 13, the “Partners,” and individually, a “Partner”).

1.3 Effective Date. [__] (the “Effective Date”).

1.4 Governing Law; Principal Office. The Partnership is formed and will operate under the laws of the State of Georgia. Its principal office is located at [_], County of [_], Georgia.

1.5 Recitals.
A. The Partners are each duly licensed physicians in good standing with the GCMB.
B. The Partners desire to associate as a partnership for the practice of medicine in accordance with the Georgia Uniform Partnership Act and applicable health-care laws.
C. In consideration of the mutual promises herein, the Partners agree as follows:

2. DEFINITIONS

The following terms have the meanings set forth below and apply throughout this Agreement. Any term not defined herein has the meaning given by applicable law.

“AAA” means the American Arbitration Association.
“Applicable Law” means all federal, state, and local statutes, regulations, rules, and orders governing the Partnership, including but not limited to O.C.G.A. Title 43, Chapter 34 and GCMB regulations.
“Arbitration Rules” means the AAA Healthcare Payor Provider Arbitration Rules, as modified by Exhibit B.
“Capital Account,” “Capital Contribution,” “Distributions,” “Profits,” and “Losses” have the meanings assigned under Subchapter K of the Internal Revenue Code and Treas. Reg. § 1.704-1 et seq.
“Disability” means the inability of a Partner to perform the essential functions of a full-time physician for ninety (90) consecutive days, certified by an independent physician.
“Dispute” has the meaning set forth in Section 14.1.
“Malpractice Claim” means any professional liability claim arising out of the provision of medical services by the Partnership or any Partner.
“Partnership” means the partnership formed by this Agreement.
“Restricted Activities” has the meaning set forth in Exhibit A.

[// GUIDANCE: Add or delete defined terms to suit the deal. Keep definitions alphabetized and cross-referenced.]

3. FORMATION; PURPOSE; TERM

3.1 Formation. The Partners hereby form a general partnership (the “Partnership”) under the Georgia Uniform Partnership Act for the purposes stated herein.

3.2 Purpose. The Partnership’s exclusive purpose is the practice of medicine and provision of ancillary health-care services lawfully permitted to be rendered by duly licensed physicians in Georgia. The Partnership shall not engage in any activity that would violate the corporate practice of medicine doctrine or Georgia’s fee-splitting prohibitions.

3.3 Name. The business will be conducted under the name [PRACTICE NAME, M.D.s, Partnership] or such other name approved by the Partners and compliant with GCMB naming regulations.

3.4 Term. The Partnership shall commence on the Effective Date and continue until dissolved under Section 13 or as required by Applicable Law.

3.5 Registration; Licensure. The Partners shall file and maintain any trade name registrations, professional entity elections, or local business licenses required under Georgia law.

4. CAPITAL CONTRIBUTIONS; OWNERSHIP; ALLOCATIONS

4.1 Initial Capital Contributions. Each Partner shall contribute the amount set forth opposite his or her name on Schedule 1 no later than five (5) Business Days after the Effective Date.

4.2 Percentage Interests. Each Partner’s initial Percentage Interest is shown on Schedule 1 and will be adjusted only in accordance with this Agreement.

4.3 Additional Contributions. Additional Capital Contributions require the written consent of Partners holding at least [__]% of Percentage Interests. No Partner is obligated to make additional contributions absent such approval.

4.4 Allocations. Profits and Losses for each Fiscal Year shall be allocated among the Partners in proportion to their Percentage Interests, subject to Code § 704(c) allocations.

4.5 Tax Classification. The Partners intend that the Partnership be taxed as a partnership for U.S. federal and Georgia income tax purposes.

5. MANAGEMENT AND VOTING

5.1 Management Authority. Except as expressly delegated, all Partners collectively manage the Partnership. Day-to-day clinical decisions are delegated to the Medical Director (Section 5.4).

5.2 Voting. Each Partner’s vote is weighted by Percentage Interest. An action requires approval of Partners holding more than fifty percent (50%) of Percentage Interests unless this Agreement specifies a different threshold.

5.3 Super-Majority Actions. The following require at least [__]% approval:
(a) Admission of a new Partner;
(b) Merger, consolidation, or sale of substantially all assets;
(c) Dissolution of the Partnership;
(d) Amending this Agreement;
(e) Incurring indebtedness exceeding $[______] in the aggregate.

5.4 Officers; Medical Director. The Partners may appoint officers, including a Medical Director, who must be a licensed Partner in good standing. The Medical Director shall oversee clinical compliance with GCMB standards.

5.5 Banking Authority. Funds shall be deposited in accounts titled to the Partnership. Two authorized signatures (one of which must be a Partner) are required on all checks exceeding $[______].

6. COMPENSATION; DISTRIBUTIONS; FEE-SPLITTING COMPLIANCE

6.1 Compensation Formula. Physician compensation shall be determined by [collections-based formula/RVU model/salary plus bonus] as set forth in a separate written policy approved under Section 5.2.

6.2 Distributions. Subject to retention of reasonable reserves, Distributions of available cash shall be made quarterly, pro rata in accordance with Percentage Interests unless otherwise agreed.

6.3 Fee-Splitting Compliance. Compensation and Distribution methodologies shall not:
(a) constitute the payment of remuneration in return for patient referrals;
(b) violate any GCMB rule on division of fees (currently Rule 360-3-.04); or
(c) create any ownership or compensation arrangement prohibited by 42 U.S.C. § 1395nn or 42 U.S.C. § 1320a-7b.

6.4 Withholding. The Partnership may withhold and pay over any taxes or other amounts required by law on behalf of any Partner.

7. BOOKS, RECORDS, AND ACCOUNTING

7.1 Fiscal Year. The fiscal year of the Partnership ends on December 31 unless otherwise required by the Internal Revenue Code.

7.2 Books and Records. Complete and accurate books of account shall be kept at the principal office and be available for inspection by any Partner during business hours.

7.3 Financial Statements. Unaudited financials will be provided within thirty (30) days after quarter-end; reviewed or audited statements shall be provided annually within ninety (90) days after fiscal year-end.

7.4 Audits. Any Partner may, at his or her own expense, cause an independent audit upon thirty (30) days’ written notice.

8. REPRESENTATIONS AND WARRANTIES

8.1 Mutual Representations of the Partners. Each Partner represents, warrants, and covenants that, as of the Effective Date and continuing thereafter:

(a) Licensure. The Partner holds an unrestricted license to practice medicine in Georgia and is in good standing with the GCMB.

(b) No Claims or Investigations. The Partner is not subject to any pending disciplinary action, criminal indictment, or civil fraud investigation that would materially impair the Partner’s ability to perform hereunder.

(c) Authority. The Partner has full right, power, and authority to enter into this Agreement and perform the obligations herein.

(d) No Conflicts. Execution and performance will not violate any other agreement, court order, or Applicable Law binding on the Partner.

8.2 Survival. The representations and warranties of this Section survive for three (3) years after a Partner’s dissociation.

9. COVENANTS AND RESTRICTIONS

9.1 Affirmative Covenants. Each Partner shall:
(a) Maintain licensure, board certifications, liability insurance, and hospital privileges as reasonably required.
(b) Comply with all Applicable Laws, including HIPAA, OSHA, Stark, Anti-Kickback, and GCMB rules.
(c) Promptly notify the Partnership of any event that could reasonably constitute an Event of Default (Section 11.1).

9.2 Negative Covenants. No Partner shall:
(a) Engage in any act that constitutes the corporate practice of medicine by a non-licensed entity;
(b) Accept or pay any illegal remuneration for patient referrals;
(c) Disclose confidential patient or Partnership information, except as permitted by law;
(d) Engage in the Restricted Activities described in Exhibit A during the term and for [__] years thereafter.

10. INSURANCE REQUIREMENTS

10.1 Professional Liability (Malpractice) Insurance. The Partnership shall maintain occurrence-based (or “tail”-covered claims-made) professional liability insurance with limits of not less than $[1,000,000] per claim and $[3,000,000] aggregate, naming each Partner as an insured.

10.2 Other Insurance. The Partnership will maintain workers’ compensation, general liability, property, and cyber liability insurance as commercially reasonable.

10.3 Tail Coverage. Upon a Partner’s withdrawal, that Partner shall, at his or her sole cost, obtain extended reporting (“tail”) coverage for the minimum period required under Applicable Law unless the Partnership maintains occurrence coverage.

11. DEFAULT; NOTICE; REMEDIES

11.1 Events of Default. Any of the following constitutes an “Event of Default” as to a Partner:
(a) Material breach of this Agreement not cured within thirty (30) days after written notice;
(b) Suspension, restriction, or revocation of medical license or DEA registration;
(c) Conviction of a felony or crime involving moral turpitude;
(d) Exclusion from participation in Medicare or Medicaid;
(e) Bankruptcy or insolvency;
(f) Willful misconduct, gross negligence, or material violation of Partnership compliance policies.

11.2 Remedies. Upon an Event of Default:
(a) The non-defaulting Partners may suspend the defaulting Partner’s participation in Distributions;
(b) The Partnership may require the defaulting Partner to tender his or her Interest for purchase under Exhibit C (with a [25]% discount) after the applicable notice and cure period;
(c) The Partnership may seek injunctive relief and/or damages.

11.3 Attorneys’ Fees. The prevailing party in any enforcement action is entitled to recover reasonable attorneys’ fees and costs.

12. INDEMNIFICATION; LIMITATION OF LIABILITY

12.1 Mutual Malpractice Indemnity. Subject to Section 12.2, each Partner (the “Indemnifying Partner”) shall indemnify, defend, and hold harmless the other Partners and the Partnership from and against any Losses arising out of a Malpractice Claim attributable to the Indemnifying Partner’s negligent act or omission.

12.2 Insurance Exhaustion. Indemnification under Section 12.1 applies only to the extent Losses are not covered by professional liability insurance.

12.3 Limitation of Liability. EXCEPT FOR (a) MALPRACTICE LIABILITY, (b) WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, OR (c) BREACHES OF CONFIDENTIALITY OR NON-COMPETE OBLIGATIONS, EACH PARTNER’S LIABILITY TO THE OTHER PARTNERS OR TO THE PARTNERSHIP SHALL NOT EXCEED THE AMOUNT OF DISTRIBUTIONS RECEIVED BY THAT PARTNER DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITY.

12.4 No Limitation on Medical Liability. Nothing in this Agreement limits any Partner’s individual professional liability to patients as prohibited by O.C.G.A. § 51-1-27 or other Applicable Law.

13. DISSOCIATION; BUY-OUT; DISSOLUTION

13.1 Voluntary Withdrawal. A Partner may voluntarily withdraw upon not less than one-hundred-eighty (180) days’ prior written notice.

13.2 Mandatory Withdrawal. A Partner experiencing an Event of Default under Section 11.1(b)–(d) shall be deemed to have withdrawn effective immediately.

13.3 Buy-Out. Upon withdrawal, the Partnership shall purchase, and the withdrawing Partner shall sell, the Partner’s Interest for the price and on the terms set forth in Exhibit C.

13.4 Dissolution. The Partnership shall dissolve upon:
(a) Vote of Partners holding at least [__]% of Percentage Interests;
(b) Only one Partner remaining;
(c) Any event requiring dissolution under Applicable Law.

13.5 Winding Up. Upon dissolution, assets shall be liquidated and distributed in accordance with O.C.G.A. Title 14 (Partnerships).

14. DISPUTE RESOLUTION

14.1 Definition of Dispute. “Dispute” means any claim, controversy, or disagreement arising out of or relating to this Agreement, whether based in contract, tort, statute, or otherwise, but excludes Malpractice Claims by third-party patients.

14.2 Escalation. The Partners shall first attempt in good faith to resolve any Dispute through direct negotiation. If unresolved within fifteen (15) Business Days, the Dispute proceeds to mediation under the AAA Healthcare Mediation Rules in [COUNTY], Georgia.

14.3 Arbitration. Any Dispute not resolved by mediation within thirty (30) days shall be finally resolved by binding arbitration under the Arbitration Rules, seated in [COUNTY], Georgia, before a single arbitrator with at least ten (10) years’ experience in health-care law. Judgment on the award may be entered in any court of competent jurisdiction.

14.4 Injunctive Relief Carve-Out. Notwithstanding Sections 14.2 and 14.3, any Partner may seek temporary or preliminary injunctive relief in the state courts of Georgia to preserve the status quo pending arbitration.

14.5 Jury Trial Waiver. [OPTIONAL] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY COURT ACTION PERMITTED UNDER THIS AGREEMENT.

15. GENERAL PROVISIONS

15.1 Amendments; Waivers. Amendments require a writing signed by Partners holding at least the super-majority percentage set forth in Section 5.3(d). Waiver of any breach must be made in writing and does not constitute waiver of any other breach.

15.2 Assignment. No Partner may assign or encumber his or her Interest except as expressly permitted herein. Any prohibited assignment is null and void.

15.3 Successors and Assigns. This Agreement binds and inures to the benefit of the Partners and their permitted successors and assigns.

15.4 Severability. If any provision is held invalid, the remainder will be enforced to the fullest extent permitted, and the invalid provision will be reformed to give effect to the Parties’ intent.

15.5 Entire Agreement. This Agreement (including its exhibits and schedules) constitutes the entire understanding among the Partners and supersedes all prior agreements, oral or written, regarding its subject matter.

15.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures and PDF copies are deemed originals for all purposes.

15.7 Notices. Any notice required by this Agreement shall be in writing and delivered (a) by hand with signed receipt, (b) by nationally recognized overnight courier, or (c) via certified mail, return receipt requested, to the addresses set forth in Section 1.2 (or as updated by notice). Notices are effective upon receipt or refusal.

15.8 Further Assurances. The Partners shall execute and deliver any documents and take other actions reasonably necessary to carry out the intent of this Agreement.

16. EXECUTION BLOCK

IN WITNESS WHEREOF, the Partners have executed this Medical Practice Partnership Agreement as of the Effective Date.

[NOTARY ACKNOWLEDGMENT BLOCK—add if desired under Georgia law]

[// GUIDANCE: Georgia does not require notarization for partnership agreements, but many lenders and professional liability carriers prefer notarized signatures. Obtain witnesses if institutional policies so require.]

SCHEDULE 1

Initial Capital Contributions & Percentage Interests

EXHIBIT A

Covenant Not To Compete / Non-Solicitation
[Detailed restrictive covenant compliant with O.C.G.A. § 13-8-53. Duration, geographic scope, and prohibited activities must be reasonable.]

EXHIBIT B

Arbitration Agreement
[Incorporate AAA clauses, selection of arbitrator qualifications, discovery limits, confidentiality protections, fee allocations.]

EXHIBIT C

Formula Buy-Sell Provisions
[Common formulas include: (i) appraised FMV of practice assets; (ii) trailing 12-month collections × multiplier less liabilities; or (iii) book value plus goodwill factor. Insert desired method.]

[// GUIDANCE: Review Stark and Anti-Kickback safe-harbor requirements if the Partnership owns ancillary service lines (e.g., imaging, clinical laboratory). Confirm that compensation formulas meet the “group practice” definition under 42 C.F.R. § 411.352 to preserve in-office ancillary exceptions.]