Medical Practice Partnership Agreement (Montana)

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Montana - Court-Ready Template)

TABLE OF CONTENTS

1. Document Header
2. Definitions

3. Operative Provisions
   3.1 Formation, Name, Purpose & Term
   3.2 Capital Contributions
   3.3 Allocation of Profits & Losses; Distributions
   3.4 Management & Voting
   3.5 Practice Licensing & Regulatory Compliance
   3.6 Compensation; Fee-Splitting Safeguards
   3.7 Books, Records & Accounting
   3.8 Banking & Spending Authority
   3.9 Partner Duties; Outside Activities
   3.10 Admission, Withdrawal & Buy-Sell

4. Representations & Warranties

5. Covenants & Restrictions (including Montana noncompete framework)
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

This MEDICAL PRACTICE PARTNERSHIP AGREEMENT (this "Agreement") is entered into as of [EFFECTIVE DATE] (the "Effective Date") by and among [FULL LEGAL NAME OF PARTNER A], [FULL LEGAL NAME OF PARTNER B], and any additional Persons admitted as Partners hereunder (each, a "Partner" and collectively, the "Partners").

RECITALS

A. Each Partner is duly licensed to practice medicine in the State of Montana under the Montana Medical Practice Act, Mont. Code Ann. § 37-3-101 et seq.
B. The Partners desire to associate to render professional medical services and to govern their relationship through this Agreement.
C. The Partners intend that this Agreement comply with all applicable Montana and federal laws, including the Montana Professional Service Corporation Act (Mont. Code Ann. § 35-4-101 et seq.), the Montana Limited Liability Company Act (Mont. Code Ann. § 35-8-101 et seq., including the professional-services provisions of § 35-8-1301 et seq.), the Montana Medical Practice Act, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), and the Stark Law (42 U.S.C. § 1395nn).

NOW, THEREFORE, in consideration of the mutual covenants herein, the Partners agree as follows.

2. DEFINITIONS

"Capital Account" means the bookkeeping account maintained for each Partner reflecting contributions, allocations, and distributions.

"CPOM" means the corporate practice of medicine doctrine. Montana applies a modified CPOM framework: only Montana-licensed physicians (or duly authorized professional entities under Mont. Code Ann. §§ 35-4-101 and 35-8-1301 et seq.) may own equity in or control the practice of medicine.

"Designated Health Service" has the meaning given in 42 U.S.C. § 1395nn (Stark Law).

"Practice" means the medical practice operated under this Agreement, doing business as [PRACTICE NAME].

"Professional Services" means medical services rendered by Partners and other licensed providers within the scope of their Montana licensure.

"Restricted Period" means the period during which a Partner is subject to post-termination restrictions described in Section 5, to the extent such restrictions fall within Mont. Code Ann. §§ 28-2-704 or 28-2-705.

"Unprofessional Conduct" has the meaning given in Mont. Code Ann. § 37-3-323 and the rules of the Montana Board of Medical Examiners.

3. OPERATIVE PROVISIONS

3.1 Formation, Name, Purpose & Term

a. Formation. The Partners form a [general partnership / professional service corporation / professional LLC] under Montana law, electing the entity form of: ☐ general partnership; ☐ professional service corporation under Mont. Code Ann. § 35-4-101 et seq.; ☐ professional LLC under Mont. Code Ann. § 35-8-1301 et seq.
b. Name. The Practice shall operate as [PRACTICE NAME] and shall comply with the naming restrictions of the elected entity statute.
c. Purpose. The exclusive purpose of the Practice is to render Professional Services and ancillary lawful activities reasonably related thereto.
d. Principal Office. [STREET ADDRESS], Montana.
e. Term. The Practice shall continue until dissolved as provided herein or by law.

3.2 Capital Contributions

a. Initial Contributions. Each Partner shall make the initial contribution set forth on Schedule A.
b. Additional Contributions. Additional capital may be required by the affirmative vote of [SUPERMAJORITY %] of Partners.
c. No Withdrawal of Capital. A Partner may not withdraw capital except as expressly permitted herein.

3.3 Allocation of Profits & Losses; Distributions

a. Net profits and losses shall be allocated [pro rata to Capital Accounts / by formula on Schedule B].
b. Distributions shall be made [monthly / quarterly] subject to reserves determined by the Managing Partner.
c. No Income from Non-Licensed Activities. No Partner shall receive distributions derived from activities that violate Montana CPOM principles or Mont. Code Ann. § 37-3-101 et seq.

3.4 Management & Voting

a. Managing Partner. [NAME] shall serve as Managing Partner, with day-to-day authority subject to the limitations herein.
b. Major Decisions. The following require approval by [SUPERMAJORITY %] of Partners: admission of new Partners; sale of substantially all assets; entry into payor or hospital affiliation agreements; incurring debt above $[AMOUNT]; amendment of this Agreement.
c. Meetings. Regular meetings shall be held [FREQUENCY]; special meetings on [NOTICE] notice.

3.5 Practice Licensing & Regulatory Compliance

a. Licensure. Each Partner shall maintain an active, unrestricted Montana medical license and DEA registration as applicable.
b. Board Compliance. The Practice shall comply with rules of the Montana Board of Medical Examiners and Mont. Code Ann. § 37-3-323 (grounds for license discipline).
c. HIPAA / MUHCIA. The Practice shall comply with HIPAA (45 C.F.R. Parts 160, 164) and the Montana Uniform Health Care Information Act, Mont. Code Ann. tit. 50, ch. 16.
d. Anti-Kickback / Stark. No Partner shall enter into a financial relationship that violates 42 U.S.C. § 1320a-7b or 42 U.S.C. § 1395nn.

3.6 Compensation; Fee-Splitting Safeguards

a. Compensation Methodology. Partner compensation shall be determined per Schedule B and shall not be based on referrals for Designated Health Services in violation of Stark.
b. Fee-Splitting Prohibitions. No Partner shall divide professional fees with non-licensed persons or otherwise engage in conduct that the Montana Board of Medical Examiners would treat as unprofessional under Mont. Code Ann. § 37-3-323 or its implementing rules (e.g., Admin. R. Mont. 24.156.625).
c. Bona Fide Employment. Compensation paid to bona fide employees and independent contractors who provide identifiable services to the Practice shall not be deemed prohibited fee-splitting.

3.7 Books, Records & Accounting

a. The Practice shall maintain books and records at the principal office.
b. Each Partner has reasonable access to records consistent with the elected entity statute.
c. The Practice shall be audited annually by [CPA FIRM] if so elected by [SUPERMAJORITY %] of Partners.

3.8 Banking & Spending Authority

a. The Practice shall maintain accounts at [BANK].
b. Single-signature authority is limited to $[AMOUNT]; expenditures above that threshold require dual signatures.

3.9 Partner Duties; Outside Activities

a. Time Commitment. Each full-time Partner shall devote substantially all professional time to the Practice.
b. Outside Activities. Outside professional activities require prior written consent of the Managing Partner, except for de minimis academic, expert-witness, or charitable work.

3.10 Admission, Withdrawal & Buy-Sell

a. Admission. New Partners may be admitted by [SUPERMAJORITY %] vote.
b. Voluntary Withdrawal. A Partner may withdraw on [NOTICE PERIOD] written notice.
c. Mandatory Buyout Events. Death, permanent disability, loss of license, conviction of a felony, or expulsion for cause shall trigger a mandatory buyout per Schedule C.
d. Valuation. The buyout price shall be determined by [METHODOLOGY: book value / appraisal / formula].

4. REPRESENTATIONS & WARRANTIES

4.1 Each Partner represents and warrants that:

a. Partner holds an active, unrestricted Montana medical license and is in good standing with the Montana Board of Medical Examiners.
b. Partner is not subject to any pending disciplinary action under Mont. Code Ann. § 37-3-323.
c. Partner has not been excluded from any federal health care program.
d. Partner has authority to enter into this Agreement.

4.2 Survival

The representations in Section 4.1 survive admission and any withdrawal to the extent necessary to enforce remedies.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality

Each Partner shall hold confidential the Practice's trade secrets, patient information, and business records, consistent with HIPAA and Mont. Code Ann. tit. 50, ch. 16.

5.2 Non-Solicitation

For [NUMBER] months following withdrawal, a former Partner shall not solicit Practice employees or contractors.

5.3 Montana Noncompete Framework (Mont. Code Ann. §§ 28-2-703 to 28-2-705)

IMPORTANT MONTANA LAW NOTICE. Montana law disfavors noncompete agreements. Mont. Code Ann. § 28-2-703 provides that any contract restraining a person from exercising a lawful profession, trade, or business is, to that extent, void, except as provided in §§ 28-2-704 and 28-2-705. The Montana Supreme Court has, however, recognized a narrow common-law reasonableness standard permitting limited, partial restraints.

a. Statutory Exceptions. Post-termination restrictions on the practice of medicine are enforceable only to the extent they fall within:
i. Sale of Business under Mont. Code Ann. § 28-2-704 (a person who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within a specified geographic area, so long as the buyer or successor carries on a like business therein); or
ii. Partnership Dissolution under Mont. Code Ann. § 28-2-705 (partners may, upon or in anticipation of dissolution of the partnership, agree that none of them will carry on a similar business within a specified geographic area where the partnership business has been transacted).

b. Sale-of-Goodwill Covenant. Upon a Partner's sale of equity or goodwill to the Practice, the selling Partner agrees, pursuant to Mont. Code Ann. § 28-2-704, not to engage in the practice of medicine within [X] miles of [LOCATION] for [Y] years, so long as the Practice continues a like business in that area.

c. Partnership-Dissolution Covenant. Upon dissolution of the Practice or a Partner's withdrawal pursuant to Section 3.10, the withdrawing Partner agrees, pursuant to Mont. Code Ann. § 28-2-705, not to engage in the practice of medicine within [X] miles of [LOCATION] for [Y] years.

d. Reasonableness; Reformation. The Partners intend that any restriction in this Section 5.3 be construed and, if necessary, reformed to the maximum extent enforceable under Mont. Code Ann. §§ 28-2-704 and 28-2-705 and Montana Supreme Court precedent. Any restriction not falling within these statutory exceptions is void under § 28-2-703 to the extent of the restraint.

5.4 Patient Continuity

Upon withdrawal, the parting Partner and the Practice shall cooperate in good faith to provide continuity of care, including notice to patients consistent with Mont. Code Ann. § 37-3-323's prohibition against patient abandonment and Board rules.

6. DEFAULT & REMEDIES

6.1 Events of Default

a. Material breach of this Agreement.
b. Loss or restriction of Montana medical license.
c. Conviction of a felony or crime of moral turpitude.
d. Conduct constituting Unprofessional Conduct under Mont. Code Ann. § 37-3-323.

6.2 Notice & Cure

The non-defaulting Partners shall provide written notice. The defaulting Partner shall have thirty (30) days to cure (where curable). License loss is non-curable.

6.3 Remedies

a. Mandatory buyout per Section 3.10.
b. Damages, including reasonable attorneys' fees.
c. Equitable relief, including injunctions to enforce confidentiality and any covenants enforceable under Mont. Code Ann. §§ 28-2-704 or 28-2-705.

7. RISK ALLOCATION

7.1 Malpractice Indemnification

Each Partner is solely responsible for the Partner's own acts of professional negligence to the extent permitted under the elected entity form. The Practice shall maintain professional liability coverage of not less than $[LIMIT] per claim and $[LIMIT] aggregate, naming each Partner.

7.2 Limitation of Liability

Except for fraud, willful misconduct, or breach of confidentiality, no Partner shall be liable to another for indirect or consequential damages.

7.3 Insurance Requirements

The Practice shall maintain:

• Professional liability (medical malpractice) coverage;
• General commercial liability;
• Cyber / data breach coverage commensurate with HIPAA exposure;
• Workers' compensation as required by Montana law.

7.4 Force Majeure

No Partner shall be liable for delay or failure to perform due to events beyond reasonable control.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement is governed by Montana law without regard to conflict-of-laws principles.

8.2 Mediation

The Partners shall attempt mediation in [CITY], Montana before initiating arbitration or litigation.

8.3 Arbitration

Disputes not resolved in mediation shall be submitted to binding arbitration under the Montana Uniform Arbitration Act, Mont. Code Ann. § 27-5-111 et seq., administered by [AAA / JAMS / OTHER].

8.4 Carve-Outs

Notwithstanding Section 8.3, either Partner may seek injunctive relief in Montana state district court to enforce confidentiality, sale-of-goodwill, or partnership-dissolution covenants enforceable under Mont. Code Ann. §§ 28-2-704 and 28-2-705.

8.5 Patient Malpractice Claims

Nothing herein affects a patient's right to proceed before the Montana Medical Legal Panel under Mont. Code Ann. § 27-6-101 et seq.

8.6 Jury Waiver

☐ The Partners waive trial by jury for inter-Partner disputes (Mont. Const. art. II, § 26 right knowingly waived).
☐ The Partners do not waive trial by jury.

9. GENERAL PROVISIONS

9.1 Amendments. Any amendment requires a signed writing approved by [SUPERMAJORITY %] of Partners.
9.2 Assignment. A Partner may not assign Practice equity except to another Montana-licensed physician or qualified professional entity, consistent with Mont. Code Ann. § 35-4-101 et seq. or § 35-8-1301 et seq.
9.3 Severability. If any provision is held invalid (including under Mont. Code Ann. § 28-2-703), remaining provisions remain enforceable, and the invalid provision shall be reformed to the maximum extent permitted by law.
9.4 Integration. This Agreement and its Schedules constitute the entire agreement.
9.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts under the Montana Uniform Electronic Transactions Act, Mont. Code Ann. § 30-18-101 et seq.
9.6 Notice. Notices shall be sent to the addresses on Schedule A by certified mail or recognized overnight courier.

10. EXECUTION BLOCK

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

SCHEDULE A - INITIAL CAPITAL CONTRIBUTIONS & ADDRESSES

[List each Partner, contribution amount, ownership %, and notice address.]

SCHEDULE B - COMPENSATION & DISTRIBUTION FORMULA

[Detail base compensation, productivity formulas (compliant with Stark), and distribution waterfall.]

SCHEDULE C - BUY-SELL VALUATION METHODOLOGY

[Specify book value, appraisal procedure, payout terms, and life/disability insurance funding.]

SOURCES AND REFERENCES

• Mont. Code Ann. § 35-4-101 et seq. (Montana Professional Service Corporation Act)
• Mont. Code Ann. § 35-8-1301 et seq. (Montana LLC Act - professional services)
• Mont. Code Ann. § 37-3-101 et seq. (Montana Medical Practice Act)
• Mont. Code Ann. § 37-3-323 (unprofessional conduct grounds)
• Admin. R. Mont. 24.156.625 (Board of Medical Examiners unprofessional conduct rule)
• Mont. Code Ann. § 28-2-703 (contracts in restraint of trade generally void)
• Mont. Code Ann. § 28-2-704 (sale-of-business exception)
• Mont. Code Ann. § 28-2-705 (partnership-dissolution exception)
• Mont. Code Ann. § 27-5-111 et seq. (Montana Uniform Arbitration Act)
• Mont. Code Ann. § 27-6-101 et seq. (Montana Medical Legal Panel)
• 42 U.S.C. § 1320a-7b (federal Anti-Kickback Statute)
• 42 U.S.C. § 1395nn (Stark Law)