Maine Medical Practice Partnership Agreement

MAINE MEDICAL PRACTICE PARTNERSHIP AGREEMENT

This Medical Practice Partnership Agreement ("Agreement") is entered into as of [__/__/____] (the "Effective Date") by and among the physicians listed in Schedule A (each a "Partner" and collectively the "Partners"), forming and operating [PRACTICE NAME], PLLC, a Maine professional limited liability company (the "Practice").

ARTICLE I. FORMATION AND PURPOSE

1.1 Entity. The Practice is organized as a Maine Professional Limited Liability Company under 31 M.R.S. § 1611 et seq. and is governed by 13 M.R.S. § 723 et seq. as incorporated by 31 M.R.S. § 1560.

1.2 Purpose. The sole professional purpose of the Practice is the rendering of allopathic or osteopathic medical services as licensed under 32 M.R.S. § 3263 et seq. The Practice may engage in any lawful business ancillary to that purpose.

1.3 Principal Office. [____________________________], Maine.

1.4 Registered Agent. [____________________________].

1.5 Term. Perpetual, unless dissolved under Article XII.

ARTICLE II. ELIGIBILITY OF PARTNERS

2.1 Licensure. Each Partner must hold and maintain in good standing an unrestricted Maine license under 32 M.R.S. ch. 48 (allopathic) or ch. 36 (osteopathic).

2.2 Disqualification. A Partner whose license is suspended, revoked, surrendered, restricted, or who becomes subject to a 32 M.R.S. § 3282-A disciplinary sanction shall be subject to mandatory withdrawal as provided in Article X.

2.3 Non-Physician Ownership. Consistent with 13 M.R.S. § 723 and 31 M.R.S. § 1560, no person other than a Maine-licensed physician (or as otherwise permitted by statute) may hold an ownership interest in the Practice.

ARTICLE III. CAPITAL CONTRIBUTIONS AND INTERESTS

3.1 Initial Contributions. Each Partner's initial capital contribution and percentage interest is set forth in Schedule A.

3.2 Additional Contributions. Additional contributions require approval under Article VI.

3.3 Capital Accounts. The Practice shall maintain a capital account for each Partner in accordance with U.S. Treasury Regulations § 1.704-1(b).

3.4 No Interest. No Partner shall receive interest on capital contributions.

ARTICLE IV. ALLOCATIONS AND DISTRIBUTIONS

4.1 Compensation Methodology. Partner compensation shall be determined per Schedule B (e.g., productivity-based, equal share, hybrid). Any productivity formula must be structured to comply with the federal physician self-referral law (Stark, 42 U.S.C. § 1395nn) and Anti-Kickback Statute (42 U.S.C. § 1320a-7b) where federal program patients are involved.

4.2 Profits and Losses. After compensation, profits and losses shall be allocated pro rata to ownership percentages.

4.3 No Improper Fee-Splitting. No compensation, profit allocation, or referral arrangement shall be structured in violation of applicable law, including federal Stark/AKS, 32 M.R.S. § 3282-A, and Maine Board of Licensure rules. Any arrangement found to be unlawful shall be reformed to the minimum extent necessary to comply.

4.4 Tax Distributions. The Practice may make tax distributions sufficient to cover Partners' state and federal tax liabilities on Practice income.

ARTICLE V. MANAGEMENT

5.1 Managing Partner. The Practice shall be managed by [a Managing Partner / a Management Committee] elected by Partners holding a majority of percentage interests. Initial Managing Partner: [____________________________].

5.2 Authority. The Managing Partner shall conduct day-to-day operations, including hiring of non-physician staff, vendor contracts, and routine financial decisions up to $[__________].

5.3 Major Decisions Requiring Supermajority. The following require approval of Partners holding at least [two-thirds (2/3)] of percentage interests:

☐ Admission of a new Partner
☐ Expulsion of a Partner
☐ Sale or merger of the Practice
☐ Borrowing in excess of $[__________]
☐ Capital expenditures in excess of $[__________]
☐ Amendment of this Agreement
☐ Adoption or material change of compensation methodology
☐ Dissolution

5.4 Meetings. Regular meetings shall occur at least [quarterly]. Special meetings may be called by any Partner on [seven (7) days'] written notice.

ARTICLE VI. PROFESSIONAL DECISIONS

6.1 Independent Medical Judgment. Notwithstanding any other provision, each Partner retains independent medical judgment in the care of patients. No business or governance provision shall override clinical judgment.

6.2 Compliance Officer. The Partners shall designate a Compliance Officer responsible for HIPAA, OSHA, Maine Board of Licensure, and federal billing compliance.

6.3 Records. Patient medical records are property of the Practice and shall be maintained for the period required by Maine law and Board rules.

ARTICLE VII. ADMISSION OF NEW PARTNERS

7.1 Eligibility. Any candidate must satisfy Article II and may be admitted upon affirmative supermajority vote (Section 5.3).

7.2 Buy-In. Buy-in terms (amount, method, vesting) shall be negotiated and documented in an addendum to Schedule A.

ARTICLE VIII. RESTRICTIVE COVENANTS (26 M.R.S. § 599-A)

8.1 Non-Competition (Owner-Partner). Upon withdrawal, expulsion, or sale of interest, a Partner shall not, for a period of [twelve (12)] months, directly or indirectly engage in the practice of medicine within a [_____]-mile radius of any office of the Practice. This restriction is given in consideration of the goodwill purchased through the buy-in/buyout under Articles VII and X.

8.2 Non-Solicitation. For [twenty-four (24)] months following separation, a former Partner shall not solicit (a) patients seen at the Practice in the [twelve (12)] months prior, or (b) employees or contractors of the Practice.

8.3 Confidentiality. Each Partner shall hold in confidence all proprietary information, patient data (subject to HIPAA), and trade secrets, both during and after participation in the Practice.

8.4 Reasonableness and Reform. The Partners agree the foregoing restrictions are reasonable in scope, geography, and duration to protect legitimate business interests including goodwill, confidential information, and patient relationships. If a court finds any restriction overbroad, the court is authorized to reform the restriction to the maximum extent enforceable under Maine law.

8.5 Statutory Compliance Notice. Each prospective Partner-employee shall receive a copy of any restrictive covenant before any offer of employment and shall be allowed at least three (3) business days to review before executing, consistent with 26 M.R.S. § 599-A.

8.6 No Improper No-Poach. The Practice does not enter into agreements with other employers prohibiting the hiring or solicitation of employees in violation of 26 M.R.S. § 599-B.

ARTICLE IX. INSURANCE

9.1 Each Partner shall maintain professional liability (medical malpractice) insurance in amounts not less than $[1,000,000] per occurrence / $[3,000,000] aggregate, or such higher amount as the Practice requires.

9.2 The Practice shall maintain general liability, cyber/HIPAA, employment practices, and entity-level coverage as the Managing Partner determines.

9.3 Tail coverage shall be addressed in the buyout under Article X.

ARTICLE X. WITHDRAWAL, EXPULSION, DEATH, DISABILITY

10.1 Voluntary Withdrawal. A Partner may withdraw upon [ninety (90) days'] written notice.

10.2 Mandatory Withdrawal. A Partner is deemed withdrawn upon:

☐ Loss, suspension, or material restriction of Maine medical license
☐ Final disciplinary action under 32 M.R.S. § 3282-A
☐ Conviction of a felony or crime of moral turpitude
☐ Exclusion from Medicare/Medicaid
☐ Death or permanent disability (defined as inability to perform essential functions for [180] consecutive days)

10.3 Expulsion. A Partner may be expelled by supermajority vote (Section 5.3) for material breach of this Agreement, persistent failure to meet professional or productivity standards, or other cause stated in writing.

10.4 Buyout. The Practice (or remaining Partners pro rata) shall purchase the departing Partner's interest at a price determined by [the methodology in Schedule C / appraisal / formula]. Payment terms: [____________________________].

10.5 Tail Insurance. Departing Partner shall obtain tail coverage at [the Partner's / the Practice's] expense in an amount not less than the Partner's prior coverage.

ARTICLE XI. DISPUTE RESOLUTION

11.1 Negotiation and Mediation. Disputes shall first be addressed through good-faith negotiation, then non-binding mediation in [Cumberland County, Maine] before a mutually agreeable mediator.

11.2 Arbitration / Litigation. Unresolved disputes shall be [submitted to binding arbitration under AAA Commercial Rules / litigated exclusively in Maine state courts in [_____] County].

11.3 Governing Law. This Agreement is governed by the laws of the State of Maine.

ARTICLE XII. DISSOLUTION

12.1 The Practice shall dissolve upon supermajority vote, judicial decree, or any event causing the Practice to have fewer than [one] Maine-licensed physician owner.

12.2 On dissolution, the Practice shall wind up affairs, transfer or destroy patient records consistent with Maine Board of Licensure rules and HIPAA, and distribute remaining assets per the Maine LLC Act.

ARTICLE XIII. GENERAL PROVISIONS

13.1 Amendment. This Agreement may be amended only by writing signed by Partners holding the supermajority percentage in Section 5.3.

13.2 Severability. If any provision is held unenforceable, the remainder shall remain in effect, and the provision shall be reformed to the maximum lawful extent.

13.3 Entire Agreement. This Agreement, together with Schedules A–C and any addenda, is the entire agreement of the Partners.

13.4 Notices. Notices shall be delivered in writing to the addresses on Schedule A.

13.5 Counterparts and Electronic Signatures. This Agreement may be signed in counterparts and by electronic signature.

SIGNATURE PAGE

SCHEDULE A — PARTNERS, CONTRIBUTIONS, INTERESTS

SCHEDULE B — COMPENSATION METHODOLOGY

[Describe productivity formula, base draw, bonus pool, call coverage premiums, etc.]

SCHEDULE C — VALUATION FORMULA FOR BUYOUTS

[Describe agreed valuation method: capital account + accrued earnings; appraisal; multiple of EBITDA; etc. Tail coverage allocation.]

SOURCES AND REFERENCES

• 13 M.R.S. ch. 22-A — Maine Professional Service Corporation Act: https://legislature.maine.gov/legis/statutes/13/title13ch22-A.pdf
• 13 M.R.S. § 723 — Definitions: https://www.mainelegislature.org/legis/statutes/13/title13sec723.html
• 31 M.R.S. § 1560 — Nature of PLLC business: https://legislature.maine.gov/statutes/31/title31sec1560.html
• 32 M.R.S. § 3282-A — Disciplinary sanctions: https://legislature.maine.gov/statutes/32/title32sec3282-A.html
• 26 M.R.S. § 599-A — Noncompete agreements: https://legislature.maine.gov/statutes/26/title26sec599-A.html
• Maine Board of Licensure in Medicine: https://www11.maine.gov/md/