MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Michigan – Professional Partnership)

[// GUIDANCE: This template assumes a traditional general or limited liability partnership owned entirely by physicians licensed in Michigan. If you intend to form a Professional Limited Liability Partnership (“PLLP”) or Professional Corporation (“PC”), conform the entity references, filing requirements, and signature blocks accordingly.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

MEDICAL PRACTICE PARTNERSHIP AGREEMENT (this “Agreement”) is entered into and effective as of [EFFECTIVE DATE] (the “Effective Date”) by and among the following licensed physicians (each, a “Partner” and collectively, the “Partners”):

• [PARTNER NAME 1], M.D./D.O., Michigan Physician License No. [__]
• [PARTNER NAME 2], M.D./D.O., Michigan Physician License No. [____]
• [Additional Partner(s)]

(Each Partner and the Partnership may be referred to individually as a “Party” and collectively as the “Parties.”)

RECITALS

A. The Partners desire to associate themselves as a Michigan professional partnership (the “Partnership”) for the purpose of practicing medicine and providing related healthcare services in compliance with all applicable Michigan and federal laws.
B. Each Partner is duly licensed and in good standing under the Michigan Public Health Code.
C. The Partners wish to set forth their understandings regarding ownership, management, operation, and distribution of the Partnership’s profits and losses.

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

2. DEFINITIONS

The following terms shall have the meanings set forth below. Defined terms appear in this Agreement in bold italics and are used consistently throughout.

“Affiliate” – any entity directly or indirectly controlled by, controlling, or under common control with a Partner.
“Agreement” – this Medical Practice Partnership Agreement, including all Schedules and Exhibits, as amended from time to time.
“Arbitration Rules” – the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), as modified by § 8.3.
“Capital Account” – a Partner’s book account maintained in accordance with § 3.3.
“Capital Contribution” – the total cash, property, or services contributed (or deemed contributed) by a Partner under § 3.2.
“Cause” – any event listed in § 6.1(a) constituting an Event of Default.
“Fee-Splitting Laws” – MICH. COMP. LAWS § 333.16221(d) and related administrative rules prohibiting unlawful splitting or dividing of professional fees.
“Governing Law” – the internal laws of the State of Michigan, without regard to conflicts principles.
“Malpractice Claim” – any claim alleging professional negligence, breach of the standard of care, or other act or omission within the scope of medical services provided by the Partnership or its Partners.
“Non-Defaulting Partner(s)” – Partner(s) other than the Defaulting Partner, as defined in § 6.1.
“Percentage Interest” – the ownership percentage of each Partner set forth in Schedule 1, as adjusted in accordance with this Agreement.
“Professional Liability Insurance” – insurance meeting the requirements of § 7.3.
“Regulatory Authorities” – collectively, the Michigan Department of Licensing and Regulatory Affairs (“LARA”), the Michigan Board of Medicine/Osteopathic Medicine & Surgery, the U.S. Department of Health and Human Services, and any successor agencies.
“Restricted Activities” – activities prohibited to Partners under § 5.4.

[// GUIDANCE: Add or delete defined terms as appropriate for the specific practice.]

3. OPERATIVE PROVISIONS

3.1 Formation; Name; Principal Office

(a) The Partners hereby form a professional partnership under the name [PRACTICE NAME], LLP (the “Partnership”).
(b) Principal office: [ADDRESS], or such other Michigan location as the Management Committee may designate.
(c) The Partnership shall file all certificates, registrations, and assumed-name filings required by Michigan law, including but not limited to a Certificate of Limited Liability Partnership with LARA if electing LLP status.

3.2 Purpose

The sole purpose of the Partnership is to practice medicine and provide ancillary healthcare services lawfully permitted to physicians licensed in Michigan, and to engage in activities incidental thereto.

3.3 Capital Contributions and Capital Accounts

(a) Initial Contributions. On or before the Effective Date, each Partner shall contribute the amount set forth opposite such Partner’s name in Schedule 1.
(b) Additional Contributions require unanimous written consent unless otherwise provided in Schedule 1.
(c) Capital Accounts shall be maintained in accordance with U.S. federal income tax principles and applicable Treasury Regulations.

3.4 Allocations and Distributions

(a) Profits and Losses shall be allocated among the Partners in proportion to their Percentage Interests, unless Schedule 2 provides otherwise.
(b) Quarterly Distributions. The Partnership shall make cash distributions no less frequently than quarterly, subject to (i) retention of reasonable reserves, and (ii) compliance with Michigan’s Fee-Splitting Laws.
(c) Tax Distributions. The Partnership shall distribute cash sufficient to allow each Partner to satisfy estimated federal, state, and local income taxes attributable to allocable Partnership income.

3.5 Management and Voting

(a) Management Committee. A Management Committee of [NUMBER] Partners shall oversee day-to-day operations.
(b) Voting. Actions of the Management Committee require a majority vote, except as otherwise specified herein.
(c) Major Decisions. The following require unanimous Partner approval:
  (i) Admission of a new Partner;
  (ii) Merger, consolidation, or sale of substantially all assets;
  (iii) Voluntary dissolution.

3.6 Books, Records, and Fiscal Year

(a) Fiscal Year: the calendar year, unless changed by tax advisor recommendation.
(b) Recordkeeping. The Partnership shall keep full and accurate books in accordance with GAAP and maintain patient records pursuant to Michigan law.
(c) Partner Access. Each Partner may inspect Partnership books during business hours upon five (5) business days’ written notice.

3.7 Bank Accounts and Signatories

All Partnership funds shall be deposited in accounts at a financial institution approved by the Management Committee. Authorized signatories are identified in Schedule 3.

3.8 Conditions Precedent

This Agreement is conditioned upon:
(a) All Partners holding active, unrestricted Michigan medical licenses;
(b) Procurement of Professional Liability Insurance per § 7.3;
(c) Timely filing of any necessary entity-formation documents.

4. REPRESENTATIONS & WARRANTIES

Each Partner hereby represents and warrants, severally and not jointly, that as of the Effective Date and continuously thereafter:

4.1 Licensure. The Partner holds an active, unrestricted license to practice medicine in Michigan and is not subject to any pending disciplinary action.

4.2 Corporate Practice Compliance. The Partner understands that, under Michigan’s corporate practice of medicine doctrine, only licensed physicians may possess an ownership interest in an entity practicing medicine; accordingly, the Partner is not acting as a nominee for any unlicensed person or entity.

4.3 No Prohibited Fee-Splitting. The Partner has not entered, and will not enter, into any arrangement that violates MICH. COMP. LAWS § 333.16221(d) or related rules.

4.4 No Conflict or Violation. Execution and performance of this Agreement does not (i) conflict with any order, judgment, or decree binding on the Partner, or (ii) constitute a breach of any other agreement to which the Partner is a party.

4.5 Authority. The Partner has full legal power and authority to enter into and perform this Agreement.

4.6 Survival. The representations and warranties in this Article 4 shall survive a Partner’s withdrawal for [SURVIVAL PERIOD, e.g., two (2) years].

5. COVENANTS & RESTRICTIONS

5.1 Compliance with Laws

Each Partner shall comply with all applicable federal and state statutes and regulations, including the Michigan Public Health Code, Medicare/Medicaid fraud and abuse laws, HIPAA, and Michigan fee-splitting rules.

5.2 Continuing Education

Each Partner shall complete the continuing medical education (“CME”) hours required by LARA and maintain documented proof thereof.

5.3 Notice of Regulatory Action

A Partner shall give written notice to the Management Committee within three (3) business days of (i) receipt of any notice of investigation, inquiry, or disciplinary action from a Regulatory Authority, or (ii) commencement of any Malpractice Claim.

5.4 Restricted Activities

Without unanimous written consent, no Partner shall:
(a) Solicit or accept any remuneration in exchange for patient referrals;
(b) Engage in any practice that violates Michigan’s Corporate Practice Restrictions or Fee-Splitting Laws;
(c) Compete within a [MILE RADIUS]-mile radius of the Partnership’s principal office for [TIME PERIOD] following withdrawal, except as prohibited by law.

[// GUIDANCE: Non-compete enforceability for physicians in Michigan is fact-specific; tailor § 5.4(c) to avoid unreasonable scope or duration.]

5.5 Confidentiality

Partners shall maintain the confidentiality of patient information and Partnership trade secrets, in accordance with HIPAA and Michigan law.

5.6 Insurance Cooperation

Each Partner shall cooperate in the defense of any Malpractice Claim, including providing testimony and records as reasonably requested.

6. DEFAULT & REMEDIES

6.1 Events of Default

An “Event of Default” occurs if a Partner (“Defaulting Partner”):
(a) Has his or her medical license suspended, revoked, or restricted in a manner materially impairing clinical practice;
(b) Fails to maintain required Professional Liability Insurance;
(c) Is convicted of a felony or crime of moral turpitude;
(d) Materially breaches this Agreement and fails to cure within fifteen (15) days after written notice.

6.2 Remedies

Upon an Event of Default, the Non-Defaulting Partners may:
(a) Suspend the Defaulting Partner’s voting and management rights;
(b) Redeem the Defaulting Partner’s Percentage Interest at Fair Market Value less a [DISCOUNT, e.g., 25 %] default discount;
(c) Seek injunctive relief to prevent ongoing harm;
(d) Recover all costs and attorney fees incurred in enforcing this Agreement.

[// GUIDANCE: Graduated remedies provide flexibility and deter breach without immediate dissolution.]

7. RISK ALLOCATION

7.1 Indemnification for Malpractice

(a) Partnership Indemnity. The Partnership shall indemnify, defend, and hold harmless each Partner from any Malpractice Claim arising out of services rendered within the ordinary course of Partnership business, except to the extent caused by (i) the Partner’s gross negligence or willful misconduct, or (ii) a violation of § 5.1 or § 5.4.
(b) Partner Indemnity. Each Partner shall indemnify the Partnership and the other Partners against any Losses arising from the Partner’s (i) gross negligence or willful misconduct, or (ii) breach of this Agreement.

7.2 Limitation of Liability

Except for (i) malpractice liability subject to Michigan statutory caps on noneconomic damages (MICH. COMP. LAWS § 600.1483), (ii) fraud, or (iii) willful misconduct, a Partner’s aggregate liability to the Partnership and the other Partners shall not exceed the greater of (A) his or her Capital Contribution, or (B) [DOLLAR AMOUNT].

7.3 Professional Liability Insurance

(a) Minimum Coverage. Each Partner shall maintain occurrence-based or tail-covered claims-made insurance with limits of not less than $[1,000,000] per claim and $[3,000,000] aggregate, or such greater limits as required by law.
(b) Proof of Coverage must be provided annually and upon reasonable request.

7.4 Force Majeure

No Partner shall be liable for failure to perform due to events beyond reasonable control (e.g., natural disasters, governmental orders, pandemics), provided the Partner gives prompt notice and uses commercially reasonable efforts to mitigate.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and all disputes arising hereunder shall be governed by the laws of the State of Michigan.

8.2 Forum Selection

Any suit, action, or proceeding not subject to arbitration shall be brought exclusively in the state courts of [COUNTY], Michigan, and the Parties hereby submit to personal jurisdiction therein.

8.3 Arbitration

(a) Scope. Any dispute arising out of or relating to this Agreement, except claims (i) for injunctive relief under § 6.2(c) or § 5.4, or (ii) to enforce an arbitration award, shall be finally resolved by binding arbitration administered by the AAA in accordance with the Arbitration Rules.
(b) Location. [DETROIT / GRAND RAPIDS / OTHER], Michigan.
(c) Panel. A single arbitrator with at least ten (10) years of healthcare law experience.
(d) Discovery. Limited to exchange of relevant documents and depositions of Party witnesses, unless the arbitrator orders otherwise.
(e) Award. The arbitrator may award any relief available at law or equity, including injunctive relief. Judgment may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver

[OPTIONAL: Each Party irrevocably waives the right to trial by jury in any litigation arising out of this Agreement.]

8.5 Injunctive Relief

Nothing herein shall limit a Party’s right to seek interim or conservatory measures in a court of competent jurisdiction.

9. GENERAL PROVISIONS

9.1 Amendments and Waivers. Must be in writing signed by all Partners. No waiver shall be implied from conduct or failure to enforce rights.

9.2 Assignment. No Partner may assign or encumber its Percentage Interest without unanimous written consent, except to a trust for estate-planning purposes where the Partner remains sole trustee and beneficiary.

9.3 Successors and Assigns. This Agreement binds and benefits the Parties and their permitted successors and assigns.

9.4 Severability. If any provision is held invalid, the remaining provisions shall remain in force, and the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.

9.5 Entire Agreement. This Agreement, together with its Schedules and Exhibits, constitutes the entire understanding among the Parties and supersedes all prior agreements.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures transmitted electronically (e.g., via PDF or DocuSign) are binding to the same extent as original signatures under the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. §§ 7001–7031.

9.7 Notices. All notices must be in writing and delivered (i) by hand with signed receipt, (ii) by nationally recognized overnight courier, or (iii) by certified U.S. Mail, return receipt requested, to the addresses in Schedule 4, or such other address as a Party designates by notice.

9.8 Headings. Headings are for convenience only and shall not affect interpretation.

10. EXECUTION BLOCK

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

[// GUIDANCE: If forming a Limited Liability Partnership, add signature lines for “By: [Practice Name], a Michigan Limited Liability Partnership,” and list managing partners as authorized signatories.]

NOTARY ACKNOWLEDGMENT (OPTIONAL – commonly omitted for partnership agreements, but included here for additional formality)

State of Michigan )
County of [_] )

On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [NAME(S)], known to me or satisfactorily proven to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he/she/they executed the same for the purposes therein contained.

Witness my hand and official seal.

Notary Public, State of Michigan
My Commission Expires: _______

SCHEDULE 1 – Capital Contributions & Percentage Interests

SCHEDULE 2 – Special Allocation or Compensation Arrangements

[Describe any productivity-based compensation, draw schedules, or RVU models. Ensure compliance with Fee-Splitting Laws.]

SCHEDULE 3 – Authorized Bank Signatories

[List signatories and transaction limits.]

SCHEDULE 4 – Notice Addresses

[// GUIDANCE: Prior to circulation, validate all bracketed placeholders, confirm insurance limits with malpractice carrier, and review restrictive covenants for enforceability under current Michigan case law.]