MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Commonwealth of Massachusetts)

[// GUIDANCE: This template is drafted for a Massachusetts medical practice organized as a professional limited liability company (“PLLC”) or professional corporation (“P.C.”). Adapt entity references, defined terms, and statutory cross-references as needed.]

DOCUMENT HEADER

This Medical Practice Partnership Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among:

• [FULL LEGAL NAME OF PHYSICIAN 1], M.D., a Massachusetts-licensed physician, residing at [ADDRESS];
• [FULL LEGAL NAME OF PHYSICIAN 2], M.D., a Massachusetts-licensed physician, residing at [ADDRESS];
• [Add additional Partners as necessary]

(each, a “Partner,” and collectively, the “Partners”).

RECITALS

A. The Partners are duly licensed physicians in good standing with the Massachusetts Board of Registration in Medicine and desire to practice medicine jointly within the Commonwealth of Massachusetts.
B. The Partners have formed [NAME OF PRACTICE, PLLC OR P.C.] (the “Practice”) under Massachusetts law for the sole and limited purpose of rendering medical services and related lawful activities.
C. The Partners wish to set forth their respective rights and obligations concerning the Practice and their partnership therein.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency of which is acknowledged, the Partners agree as follows:

TABLE OF CONTENTS

1. Definitions
2. Formation; Purpose; Term
3. Capital Contributions; Ownership Interests
4. Management and Governance
5. Professional Conduct and Compliance
6. Compensation; Distributions
7. Books, Records, and Accounting
8. Insurance
9. Admission, Withdrawal, Transfer, and Buy-Out
10. Representations and Warranties
11. Covenants and Restrictions
12. Default; Notice; Remedies
13. Risk Allocation
14. Dispute Resolution
15. General Provisions
16. Execution

(Section cross-references are internal hyperlinks in most document-management systems.)

1. DEFINITIONS

Unless the context requires otherwise, capitalized terms used in this Agreement have the meanings set forth below. All definitions apply equally to the singular and plural forms.

“Accounting Period” means each fiscal year of the Practice, and any shorter period for which an allocation or computation is required.

“Adjusted Capital Account” means a Partner’s Capital Account as adjusted pursuant to Section 3.3.

“Affiliate” means, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

“Agreement” has the meaning set forth in the preamble.

“Arbitration Rules” means the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) then in effect.

“Capital Account” has the meaning assigned in Section 3.3.

“Code” means the Internal Revenue Code of 1986, as amended.

“Defaulting Partner” has the meaning assigned in Section 12.1.

“Disability” means a mental or physical condition that materially impairs a Partner’s ability to practice medicine for a consecutive period of [] days or an aggregate of [] days in any [12]-month period.

“Effective Date” has the meaning set forth in the preamble.

“Fair Market Value” means the price that would be paid by a willing buyer to a willing seller, each having reasonable knowledge of the relevant facts and neither under compulsion to buy or sell, as determined under Section 9.4.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations.

“Indemnified Party” and “Indemnifying Party” have the meanings assigned in Section 13.1.

“Interest” means a Partner’s entire ownership interest in the Practice, including the right to share in profits, losses, and distributions.

“Material Breach” means a breach that substantially defeats the purpose of this Agreement or causes material harm to the Practice.

“Non-Competition Period” has the meaning assigned in Section 11.4.

“Partner” and “Partners” have the meanings set forth in the preamble.

“Practice” has the meaning set forth in the recitals.

“Practice Assets” means all tangible and intangible assets of the Practice.

“Required Insurance” has the meaning assigned in Section 8.1.

“State Court” means the state courts of competent jurisdiction located within the Commonwealth of Massachusetts.

[// GUIDANCE: Add, delete, or modify defined terms to align with the Practice’s structure.]

2. FORMATION; PURPOSE; TERM

2.1 Legal Form. The Partners have organized the Practice as a [Professional Limited Liability Company / Professional Corporation] under the laws of the Commonwealth of Massachusetts. The Partners shall take all actions necessary to maintain such status, including compliance with professional entity requirements and filing of annual reports.

2.2 Purpose. The sole purpose of the Practice is to engage in the professional practice of medicine and any ancillary activities permissible under Massachusetts law, including but not limited to operation of medical offices, employment of allied health professionals, and participation in healthcare networks. No other business may be undertaken without the unanimous written consent of the Partners.

2.3 Term. The term of the Practice commenced on [ORGANIZATION DATE] and shall continue until dissolved in accordance with this Agreement or applicable law.

3. CAPITAL CONTRIBUTIONS; OWNERSHIP INTERESTS

3.1 Initial Contributions. Each Partner shall make the capital contribution set forth opposite his or her name on Schedule 3-A no later than the Effective Date.

3.2 Additional Contributions. No Partner shall be required to make additional contributions without such Partner’s written consent; however, the Vote of Partners (as defined in Section 4.2) may require proportionate additional contributions to the extent necessary to satisfy regulatory capital or solvency requirements.

3.3 Capital Accounts. A separate Capital Account shall be established and maintained for each Partner in accordance with Treasury Regulations § 1.704-1(b)(2)(iv).

3.4 Ownership Interests. Each Partner’s percentage Interest in profits, losses, and distributions is set forth in Schedule 3-A. Interests shall be adjusted only as expressly provided herein.

[// GUIDANCE: Attach Schedules at the end of the document for capitalization tables, buy-in amounts, etc.]

4. MANAGEMENT AND GOVERNANCE

4.1 Management Committee. Day-to-day management shall be vested in a management committee (the “Management Committee”) composed of [__] Partners. Election, removal, and replacement of committee members require a Vote of Partners.

4.2 Vote of Partners. Unless otherwise provided, any matter requiring Partner approval shall be decided by Partners holding more than [__]% of the aggregate Interests (a “Vote of Partners”).

4.3 Meetings; Quorum. Regular meetings shall be held at least [quarterly]. A quorum consists of Partners holding at least [__]% of the aggregate Interests. Meetings may be held via teleconference or video conference.

4.4 Officers. The Management Committee may appoint officers (e.g., President, Treasurer) as necessary, each of whom shall serve at the pleasure of the Management Committee.

4.5 Deadlock. If the Management Committee is deadlocked on any material decision for more than [30] days, the matter shall be submitted to binding arbitration under Section 14.

5. PROFESSIONAL CONDUCT AND COMPLIANCE

5.1 Licensure. Each Partner represents and covenants that he or she:
(a) is and will remain duly licensed to practice medicine in the Commonwealth of Massachusetts;
(b) has and will maintain all DEA registrations and other credentials necessary for the performance of duties; and
(c) shall promptly notify the Management Committee of any threatened or actual disciplinary action.

5.2 Corporate Practice Restrictions. The Partners shall ensure the Practice maintains compliance with the Massachusetts prohibition on the corporate practice of medicine, including adherence to professional entity statutes, ownership restrictions, and Board of Registration reporting obligations.

5.3 Fee-Splitting. No Partner shall, directly or indirectly, engage in prohibited fee-splitting or pay or accept remuneration for patient referrals in violation of Massachusetts law or federal health-care fraud and abuse statutes. All remuneration arrangements with third parties (including management services organizations) shall be structured to comply with applicable safe harbors and exceptions.

5.4 Standard of Care. Each Partner shall render services at a level consistent with the prevailing standard of medical practice, exercise independent medical judgment, and comply with clinical policies adopted by the Practice.

5.5 HIPAA and Patient Privacy. Partners shall comply with HIPAA and Massachusetts data-security regulations (including 201 CMR 17.00). Breaches of protected health information shall be reported in accordance with Practice policy and applicable law.

6. COMPENSATION; DISTRIBUTIONS

6.1 Compensation Plan. Partner compensation shall be determined annually by the Management Committee in accordance with the compensation methodology set forth on Schedule 6-A. Compensation shall consist of:
(a) Base draw;
(b) Productivity or collections-based bonus; and
(c) Equity distributions.

6.2 Distributions. Subject to applicable law and lender covenants, net cash flow shall be distributed to Partners pro rata based on their Interests, no less frequently than [quarterly].

6.3 Withholding. The Practice may withhold amounts from distributions as reasonably necessary to meet tax obligations, working capital, or reserve requirements.

7. BOOKS, RECORDS, AND ACCOUNTING

7.1 Fiscal Year. The fiscal year of the Practice shall end on [FISCAL YEAR END].

7.2 Accounting Method. The Practice shall maintain its books in accordance with generally accepted accounting principles (“GAAP”) consistently applied.

7.3 Access. Partners and their authorized representatives shall have reasonable access to the books and records of the Practice during normal business hours.

7.4 Tax Matters Partner. The Management Committee shall designate a “Partnership Representative” under Code § 6223 who shall have authority to bind the Practice in federal partnership tax proceedings.

8. INSURANCE

8.1 Required Insurance. The Practice shall maintain, at a minimum:
(a) Professional liability (malpractice) insurance with limits of not less than [MALPRACTICE LIMITS] per claim and [MALPRACTICE LIMITS] aggregate;
(b) General liability insurance; and
(c) Workers’ compensation and employer’s liability insurance as required by law.

8.2 Tail Coverage. Upon termination of a Partner’s Interest for any reason, that Partner shall procure or fund extended reporting (“tail”) coverage in an amount and for a duration reasonably satisfactory to the Practice.

9. ADMISSION, WITHDRAWAL, TRANSFER, AND BUY-OUT

9.1 Admission of New Partners. Admission of a new partner requires (a) recommendation by the Management Committee, (b) licensure and good standing, and (c) a Vote of Partners.

9.2 Voluntary Withdrawal. A Partner may withdraw upon [180] days’ prior written notice, subject to compliance with Section 9.5 (Buy-Out).

9.3 Involuntary Withdrawal. The Practice may require withdrawal upon: (a) loss or suspension of medical license; (b) conviction of a felony; (c) Disability, as defined; or (d) Material Breach not cured within the period specified in Section 12.2.

9.4 Valuation. Fair Market Value of a withdrawing Partner’s Interest shall be determined by an independent valuation firm mutually agreed by the Partner and the Practice, or, failing agreement, by an appraiser appointed under the AAA rules.

9.5 Buy-Out Payment. The Practice shall pay the purchase price for the withdrawing Partner’s Interest in [equal quarterly installments over 24 months], subject to offsets for any amounts owed to the Practice.

9.6 Restrictions on Transfer. No Partner may sell, assign, pledge, or otherwise transfer any Interest except as expressly provided in this Section 9.

10. REPRESENTATIONS AND WARRANTIES

10.1 Each Partner represents and warrants to the Practice and to the other Partners that, as of the Effective Date and throughout the term:

(a) Authority. He or she has full power and authority to enter into and perform this Agreement.
(b) No Conflict. The execution and delivery of this Agreement do not violate any other agreement or legal obligation.
(c) Licensure. He or she holds an unrestricted license to practice medicine in Massachusetts and knows of no circumstance that would reasonably be expected to result in suspension, probation, or revocation.
(d) Good Standing. He or she is not party to any pending malpractice claim or disciplinary proceeding that has not been disclosed in Schedule 10-A.

10.2 Survival. The representations and warranties in this Section 10 survive the execution of this Agreement and any Partner’s withdrawal for a period of [2] years.

11. COVENANTS AND RESTRICTIONS

11.1 Non-Solicitation of Patients. During the term and for [18] months thereafter, a withdrawing Partner shall not solicit or attempt to solicit any patient of the Practice for the purpose of providing competing medical services, except as required by patient choice or continuity-of-care obligations under applicable regulations.

11.2 Non-Solicitation of Employees. During the term and for [12] months thereafter, no Partner shall solicit for employment any employee of the Practice.

11.3 Confidentiality. Each Partner shall hold in strict confidence all proprietary and confidential information of the Practice, including patient data, financial data, trade secrets, and business plans.

11.4 Non-Competition. During the term and for [12] months after withdrawal (the “Non-Competition Period”), a withdrawing Partner shall not establish, own, or practice medicine at a facility located within a [10-mile] radius of any Practice office, except as otherwise permitted by a Vote of Partners and to the extent enforceable under Massachusetts law.

[// GUIDANCE: Massachusetts courts scrutinize physician non-competes; consider limiting to non-solicitation if seeking maximum enforceability.]

11.5 Compliance Program Participation. Partners shall actively participate in the Practice’s written compliance program, annual training, and internal audits.

12. DEFAULT; NOTICE; REMEDIES

12.1 Events of Default. A “Defaulting Partner” is any Partner who:
(a) Materially breaches this Agreement;
(b) Fails to cure any monetary default within [15] days after written notice;
(c) Fails to cure any non-monetary default within [30] days after written notice;
(d) Is expelled by the Board of Registration in Medicine; or
(e) Files for bankruptcy protection.

12.2 Remedies. Upon an Event of Default, and without limiting other rights, the non-defaulting Partners may:
(i) Suspend the Defaulting Partner’s voting rights;
(ii) Require the Defaulting Partner to withdraw under Section 9.3;
(iii) Offset damages against any distributions otherwise payable; and
(iv) Seek equitable relief, including injunctive relief, in State Court.

12.3 Attorney Fees. The prevailing party in any action or arbitration arising under this Agreement is entitled to reasonable attorney fees, costs, and expenses.

13. RISK ALLOCATION

13.1 Indemnification. Subject to Section 13.2, each Partner (“Indemnifying Party”) shall indemnify, defend, and hold harmless the Practice and the other Partners (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities, judgments, settlements, and expenses (including reasonable attorney fees) arising out of or relating to:
(a) The Indemnifying Party’s professional negligence, malpractice, or willful misconduct;
(b) The Indemnifying Party’s breach of this Agreement or violation of applicable law; or
(c) Any act or omission of the Indemnifying Party outside the scope of the Practice’s policies or compliance program.

13.2 Limitation of Liability. Except for (i) malpractice claims covered by Required Insurance up to the policy limits, (ii) intentional misconduct, or (iii) breaches of confidentiality or non-competition obligations, each Partner’s aggregate liability to the Practice and the other Partners for any claim arising under this Agreement shall not exceed [MALPRACTICE LIMITS OR OTHER CAP].

13.3 Force Majeure. No Partner shall be liable for failure to perform due to events beyond reasonable control, including acts of God, governmental orders, pandemics, or labor disputes, provided the affected Partner gives prompt notice and uses commercially reasonable efforts to resume performance.

14. DISPUTE RESOLUTION

14.1 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the Commonwealth of Massachusetts, without regard to conflict-of-laws principles.

14.2 Forum Selection. Any suit, action, or proceeding seeking injunctive relief or other equitable remedy shall be brought exclusively in the State Court, and each Partner irrevocably submits to the jurisdiction of such courts.

14.3 Arbitration. Except for matters under Section 14.2, any dispute, controversy, or claim arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the AAA under the Arbitration Rules. The arbitration shall take place in [CITY], Massachusetts before a panel of three arbitrators knowledgeable in healthcare law. Judgment on the award may be entered in any court of competent jurisdiction.

14.4 Consolidation. Multiple pending arbitrations involving common issues may be consolidated upon motion of any party and approval of the AAA.

14.5 Jury Trial Waiver. [OPTIONAL] EACH PARTNER KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

14.6 Confidentiality of Proceedings. All arbitration proceedings, filings, and awards shall be confidential.

15. GENERAL PROVISIONS

15.1 Amendment; Waiver. This Agreement may be amended only by a written instrument executed by Partners holding at least [__]% of the aggregate Interests, except amendments that (a) increase a Partner’s required capital contribution, (b) restrict a Partner’s distributions, or (c) extend the Non-Competition Period shall require unanimous consent. Waiver of any right must be in writing and shall not constitute waiver of any subsequent breach.

15.2 Assignment. No Partner may assign or delegate any rights or obligations under this Agreement without the Vote of Partners, and any attempted assignment in violation of this Section is null and void.

15.3 Successors and Assigns. This Agreement binds and benefits the Partners and their respective permitted successors, assigns, heirs, and personal representatives.

15.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall nevertheless be enforced, and the court or arbitrator shall reform the invalid provision to the maximum extent enforceable.

15.5 Entire Agreement. This Agreement, including all Schedules, constitutes the entire agreement among the Partners with respect to the subject matter and supersedes all prior understandings.

15.6 Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures transmitted electronically (e.g., via PDF or DocuSign) are deemed original signatures.

15.7 Notices. Any notice required or permitted shall be in writing and deemed given when delivered personally, sent by certified mail (return receipt requested), or sent by nationally recognized overnight courier, to the addresses set forth on Schedule 15-A or such other address as a Partner designates.

15.8 Headings. Section headings are for convenience only and do not affect the interpretation of this Agreement.

16. EXECUTION

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

[// GUIDANCE: Add acknowledgments for entity signature (e.g., by Manager of PLLC) if Partners practice through a separate entity.]

(Notary acknowledgment or witness statement added if required by local practice.)

SCHEDULES

• Schedule 3-A – Capital Contributions and Ownership Interests
• Schedule 6-A – Compensation Methodology
• Schedule 10-A – Pending or Threatened Claims / Disciplinary Matters
• Schedule 15-A – Notice Addresses

[END OF AGREEMENT]