MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(South Carolina)

[// GUIDANCE: This template is drafted for a physician (or physician-assistant) partnership practicing clinical medicine in South Carolina. Adapt for other specialties or additional allied‐health partners as needed.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Formation; Purpose; Term
4. Capital Contributions; Percentage Interests
5. Management and Voting
6. Partner Duties and Performance Standards
7. Financial Matters
8. Representations & Warranties
9. Covenants & Restrictions
10. Defaults; Dissociation; Remedies
11. Risk Allocation
12. Dispute Resolution
13. General Provisions
14. Execution Block

1. DOCUMENT HEADER

1.1 Parties.
This Medical Practice Partnership Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and among the following licensed medical professionals (individually, a “Partner” and collectively, the “Partners”):

• [PARTNER 1 LEGAL NAME], M.D. / D.O., South Carolina license no. [____]
• [PARTNER 2 LEGAL NAME], M.D. / D.O., South Carolina license no. [____]
• [ADDITIONAL PARTNERS, IF ANY]

1.2 Recitals.
A. The Partners wish to associate together as a South Carolina [general partnership / LLP / professional limited liability partnership] (the “Partnership”) for the purpose of practicing medicine in accordance with the South Carolina Medical Practice Act, S.C. Code Ann. § 40-47-10 et seq.
B. The Partners are each duly licensed and in good standing with the South Carolina Board of Medical Examiners.
C. In consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency of which is acknowledged, the Partners agree as follows.

1.3 Governing Law.
This Agreement and the rights of the Partners shall be governed by the internal laws of the State of South Carolina without regard to conflicts-of-law principles.

2. DEFINITIONS

For convenience, certain capitalized terms are defined alphabetically below. Any term used but not defined shall have its ordinary meaning under South Carolina law.

“AAA” means the American Arbitration Association.
“Adjusted Net Profits” has the meaning given in Section 7.2.
“Affiliate” means, with respect to a person, any entity that directly or indirectly controls, is controlled by, or is under common control with that person.
“Business Day” means any day other than Saturday, Sunday, or a South Carolina state holiday.
“Capital Account” has the meaning given in Section 4.3.
“Cause” has the meaning given in Section 10.1(a).
“Clinic Premises” means the principal office located at [ADDRESS] and any additional locations approved under Section 5.3.
“Competitive Activity” has the meaning given in Section 9.3.
“Gross Revenue” means all professional fees and other income generated by the Partnership, whether collected or uncollected.
“Malpractice Claim” means any claim alleging professional negligence, medical malpractice, or violation of professional standards arising from clinical services rendered by a Partner or by the Partnership.
“Percentage Interest” means the ownership percentage set forth for each Partner in Schedule A, as amended from time to time.
“State Court” means the Court of Common Pleas for [COUNTY], South Carolina.

[// GUIDANCE: Add additional definitions as needed for compensation models, ancillary services, telemedicine, etc.]

3. FORMATION; PURPOSE; TERM

3.1 Formation. The Partners hereby form the Partnership under the South Carolina Uniform Partnership Act (1994), S.C. Code Ann. § 33-41-101 et seq., and, if applicable, shall file a statement of partnership authority and any fictitious-name filings required.

3.2 Purpose. The sole purpose of the Partnership is the lawful practice of medicine and such ancillary activities as are reasonably related thereto and permitted by South Carolina’s corporate-practice-of-medicine restrictions.

3.3 Term. The Partnership shall commence on the Effective Date and shall continue indefinitely unless terminated in accordance with Section 10.

4. CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

4.1 Initial Contributions. On the Effective Date each Partner shall contribute the cash and/or property set forth opposite such Partner’s name on Schedule A.

4.2 Additional Capital Calls. Additional capital contributions shall require the affirmative vote of Partners holding at least [SUPERMAJORITY %] of the Percentage Interests. No Partner shall be required to lend money to the Partnership.

4.3 Capital Accounts. An individual Capital Account shall be maintained for each Partner in accordance with generally accepted accounting principles (GAAP) and applicable tax regulations.

5. MANAGEMENT AND VOTING

5.1 Managing Partner(s). The Partners hereby designate [NAME(S)] as the initial Managing Partner(s) (collectively, the “Managing Partner”) with day-to-day operational authority, subject to the limitations herein.

5.2 Major Decisions. The following actions require approval of Partners holding at least [SUPERMAJORITY %] of the Percentage Interests:
(a) Merger, consolidation, or sale of substantially all assets;
(b) Admission or expulsion of a Partner;
(c) Dissolution or winding-up;
(d) Purchase or lease of real property;
(e) Capital expenditures exceeding [$ ___].

5.3 Additional Clinical Locations. The Partnership may establish additional clinics within South Carolina upon approval under Section 5.2 and compliance with local zoning, DHEC, and Board of Medical Examiners notice requirements.

5.4 Voting Mechanics. Voting may occur in person, by secure video conference, or by written consent in lieu of meeting.

6. PARTNER DUTIES AND PERFORMANCE STANDARDS

6.1 Licensure & Credentialing. Each Partner shall at all times:
(a) Maintain an unrestricted South Carolina medical license, Board certification (if applicable), and all DEA registrations;
(b) Comply with S.C. Code Ann. § 40-47-10 et seq. and applicable Board regulations;
(c) Complete continuing medical education (CME) at or above minimum state requirements.

6.2 Clinical Hours. Unless otherwise approved by the Managing Partner, each full-time Partner shall provide a minimum of [____] patient-contact hours per week at the Clinic Premises.

6.3 Quality Assurance. Partners shall participate in peer review, morbidity and mortality conferences, and comply with Partnership policies derived from CMS, Joint Commission, and specialty society guidelines.

6.4 Non-Delegable Duties. No Partner may delegate professional responsibilities in violation of fee-splitting or supervision rules.

6.5 Outside Activities. Subject to Section 9.3, Partners may engage in academic teaching, research, or volunteer care, provided such activities do not materially interfere with Partnership obligations.

7. FINANCIAL MATTERS

7.1 Books and Records. The Partnership shall maintain complete and accurate financial records in accordance with GAAP and HIPAA regulations.

7.2 Profit & Loss Allocation. Net profits and losses shall be allocated to Partners pro rata in proportion to their respective Percentage Interests unless a duly adopted Compensation Plan (Schedule B) provides otherwise.

7.3 Distributions. Subject to reasonable working capital reserves, the Partnership shall make quarterly distributions of Adjusted Net Profits within [____] days after quarter-end.

7.4 Compensation Plan. The Partners may adopt and amend a physician compensation methodology (e.g., productivity-based RVU model) as Schedule B, consistent with federal and state fee-splitting prohibitions.

7.5 Tax Matters. The Partnership shall be treated as a partnership for federal and state tax purposes unless the Partners unanimously elect otherwise. [PARTNER NAME] is designated as the “partnership representative” under IRC § 6223.

8. REPRESENTATIONS & WARRANTIES

Each Partner represents and warrants to the others that, as of the Effective Date and continuing thereafter:

(a) Authorization. He/she has the legal capacity and authority to enter into this Agreement.
(b) Licensure. His/her medical license and hospital privileges are in good standing without restriction, reprimand, or pending disciplinary action.
(c) No Exclusions. He/she is not excluded from participation in Medicare, Medicaid, or other federal healthcare programs.
(d) No Conflicts. Execution of this Agreement does not violate any other agreement or court order by which the Partner is bound.

Survival: These representations and warranties shall survive the Partner’s withdrawal or the termination of the Partnership for a period of [___] years.

9. COVENANTS & RESTRICTIONS

9.1 Compliance Programs. The Partnership shall implement a written compliance program addressing Stark, Anti-Kickback Statute, HIPAA, OSHA, and South Carolina fee-splitting rules.

9.2 Non-Solicitation of Staff. During the term and for [12] months thereafter, no Partner shall solicit or hire any employee of the Partnership without prior written consent of the Managing Partner.

9.3 Non-Competition. During the term and for [____] months post-dissociation, a Partner shall not directly or indirectly engage in Competitive Activity within a radius of [____] miles of any Clinic Premises, except as permitted by Section 6.5.
[// GUIDANCE: South Carolina generally enforces reasonable physician non-competes; tailor duration and geographic scope to specialty and local market.]

9.4 Confidentiality. All Partners shall maintain the confidentiality of Protected Health Information (PHI) and proprietary business information.

9.5 Insurance. The Partnership shall maintain minimum professional liability insurance coverage of [$__] per claim / [$__] aggregate, and each Partner shall be named as an insured.

10. DEFAULTS; DISSOCIATION; REMEDIES

10.1 Events of Default. “Event of Default” means:
(a) Cause—disciplinary action resulting in suspension, revocation, or restriction of a Partner’s medical license;
(b) Material breach of this Agreement not cured within [30] days of written notice;
(c) Willful misconduct or gross negligence;
(d) Bankruptcy or insolvency of a Partner.

10.2 Consequences. Upon an Event of Default, the non-defaulting Partners may elect to:
(i) Suspend the defaulting Partner’s management and voting rights;
(ii) Require redemption of the defaulting Partner’s interest per Section 10.4;
(iii) Seek injunctive relief under Section 12.6.

10.3 Voluntary Withdrawal. A Partner may withdraw on [180] days’ prior written notice, subject to tail insurance obligations.

10.4 Buy-Out Formula. Redemption price = the withdrawing Partner’s Capital Account plus [x] times trailing-12-month average compensation, adjusted for goodwill impairment and any Malpractice Claim reserves.

10.5 Expulsion. Partners holding at least [SUPERMAJORITY %] of Percentage Interests may expel a Partner for Cause after an opportunity to be heard.

10.6 Attorney Fees. The prevailing party in any action to enforce this Agreement shall recover reasonable attorney fees and costs.

11. RISK ALLOCATION

11.1 Indemnification for Malpractice.
(a) Individual Responsibility. Each Partner (“Indemnifying Partner”) shall indemnify, defend, and hold harmless the Partnership and the other Partners from any Malpractice Claim to the extent arising out of the Indemnifying Partner’s direct patient care or breach of duty.
(b) Joint Claims. If a Malpractice Claim alleges joint liability, indemnification obligations shall be apportioned pro rata based on adjudicated fault or, if unresolved, by equal shares.

11.2 Limitation of Liability. Except for willful misconduct or breach of confidentiality, the liability of any Partner to the Partnership or another Partner for monetary damages shall not exceed the limits of the professional liability insurance required under Section 9.5.

11.3 Insurance Cooperation. Partners shall fully cooperate with insurers, provide timely notice of claims, and refrain from admissions of liability without insurer consent.

11.4 Force Majeure. No Partner shall be liable for delay or failure in performance caused by events beyond reasonable control, including epidemics, acts of God, or governmental orders, provided the affected Partner gives prompt notice and resumes performance as soon as practicable.

12. DISPUTE RESOLUTION

12.1 Negotiation. The Partners shall first attempt in good faith to resolve any dispute through informal negotiation between the Managing Partner and the aggrieved Partner(s).

12.2 Mediation. If not resolved within [30] days, the dispute shall be submitted to non-binding mediation in [CITY], South Carolina, administered by the AAA.

12.3 Arbitration. Any dispute not resolved by mediation shall be finally settled by confidential arbitration administered by the AAA Healthcare Payor Provider Arbitration Rules in effect on the date of the notice of arbitration.

(a) Seat of Arbitration: [CITY], South Carolina.
(b) Panel: One arbitrator mutually agreed or, failing agreement, appointed by the AAA.
(c) Discovery: Limited to production of relevant, non-privileged documents and expert reports.
(d) Award: The arbitrator may grant any relief a state court could grant, including injunctive relief. Judgment on the award may be entered in State Court.

12.4 Forum Selection. Notwithstanding Section 12.3, any application for temporary, preliminary, or permanent injunctive relief shall be filed exclusively in State Court.

12.5 Jury Waiver. [OPTIONAL: EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY JUDICIAL PROCEEDING ARISING OUT OF THIS AGREEMENT.]

12.6 Specific Performance. Each Partner agrees that breach of Sections 9.2–9.4 would cause irreparable harm for which monetary damages are inadequate; therefore, the non-breaching Partners may seek specific performance or injunctive relief without posting bond.

13. GENERAL PROVISIONS

13.1 Amendments. This Agreement may be amended only by a written instrument signed by Partners holding at least [SUPERMAJORITY %] of the Percentage Interests, except that amendments affecting economic rights require unanimous consent.

13.2 Waiver. No waiver shall be effective unless in writing and signed by the waiving party. A waiver on one occasion is not a waiver on any subsequent occasion.

13.3 Assignment. No Partner may assign or encumber his/her Partnership interest except as expressly permitted herein.

13.4 Successors & Assigns. This Agreement binds and benefits the Partners and their respective heirs, legal representatives, and permitted assigns.

13.5 Severability. If any provision is held unenforceable, the remaining provisions shall be reformed to most closely effectuate the parties’ intent.

13.6 Entire Agreement. This Agreement (including Schedules) constitutes the entire understanding of the Partners and supersedes all prior agreements.

13.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and signatures delivered by electronic means (e.g., DocuSign) shall be binding.

13.8 Notices. All notices shall be in writing and deemed given when delivered personally, by certified mail (return receipt requested), or by nationally recognized courier to the addresses set forth on Schedule A (or as updated by notice).

14. EXECUTION BLOCK

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

[OPTIONAL NOTARIZATION BLOCK – use if required by lender or county recording.]

SCHEDULE A

(Partners, Initial Capital Contributions, Percentage Interests, Notice Addresses)

SCHEDULE B

(Compensation Plan)
[// GUIDANCE: Insert RVU-based, collections-based, or salary-plus-bonus formula. Ensure compliance with federal Stark and Anti-Kickback rules and South Carolina fee-splitting prohibitions.]

[// GUIDANCE: Review local hospital bylaws, payer credentialing agreements, and any recruitment incentives for additional integration.]