Medical Practice Partnership Agreement

MEDICAL PRACTICE PARTNERSHIP AGREEMENT

(Vermont – Court-Ready Template)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Formation, Name, Purpose, and Term
4. Capital Contributions
5. Allocation of Profits and Losses; Distributions
6. Management and Voting
7. Practice Licensing and Regulatory Compliance
8. Compensation Methodology; Fee-Splitting Safeguards
9. Books, Records, and Accounting
10. Banking and Spending Authority
11. Partner Duties; Outside Activities
12. Admission, Withdrawal, and Buy-Sell
13. Representations and Warranties
14. Covenants and Restrictive Covenants
15. Default and Remedies
16. Risk Allocation and Indemnification
17. Insurance Requirements
18. Dispute Resolution
19. General Provisions
20. Execution Block

1. DOCUMENT HEADER

MEDICAL PRACTICE PARTNERSHIP AGREEMENT (this "Agreement") is made and entered into as of [__/__/____] (the "Effective Date") by and among [FULL LEGAL NAME OF PARTNER A], [FULL LEGAL NAME OF PARTNER B], and any other Persons admitted as Partners pursuant hereto (each, a "Partner" and collectively, the "Partners").

RECITALS

A. Each Partner is duly licensed under 26 V.S.A. ch. 23 (Vermont Medical Practice Act) to practice medicine in the State of Vermont.
B. The Partners wish to associate as a partnership for the purposes set forth herein and to govern their relationship and the management and operation of the medical practice described below.
C. The Partners intend that this Agreement comply with all applicable Vermont and federal laws, including without limitation the Vermont Business Corporation Act (11A V.S.A.) (to the extent of any professional corporation overlay), the Vermont Limited Liability Company Act (11 V.S.A. ch. 25), and all rules of the Vermont Board of Medical Practice.

NOW, THEREFORE, in consideration of the mutual covenants herein and for other good and valuable consideration, the Partners agree as follows:

2. DEFINITIONS

• "Board" — The Vermont Board of Medical Practice.
• "Capital Account" — As maintained under Section 4 and consistent with Treas. Reg. § 1.704-1(b).
• "Disability" — A Partner's inability, by reason of physical or mental impairment, to perform the essential functions of a practicing physician for [____] consecutive days or [____] days in any 12-month period.
• "Practice" — The medical practice operating under the name set forth in Section 3.
• "Partnership Interest" — A Partner's economic and governance rights under this Agreement.
• "Restricted Area" — The geographic area described in Section 14.

3. FORMATION, NAME, PURPOSE, AND TERM

4. CAPITAL CONTRIBUTIONS

A. Initial Contributions. Each Partner shall make initial contributions as set forth on Schedule A.
B. Additional Contributions. Required only on unanimous written consent of the Partners.
C. No Interest. No Partner shall be entitled to interest on capital contributions.

5. ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS

A. Allocation. Profits and losses shall be allocated in proportion to Partnership Interests unless otherwise agreed in writing.
B. Distributions. Quarterly distributions to be made to the extent of available cash and after reserves established by majority vote.
C. Tax Distributions. Minimum distribution sufficient to cover each Partner's tax liability on allocated income.

6. MANAGEMENT AND VOTING

A. Managing Partner. [NAME] shall serve as initial Managing Partner.
B. Major Decisions. The following require unanimous Partner consent:

C. Meetings. Quarterly regular meetings; special meetings on [____] days' notice.

7. PRACTICE LICENSING AND REGULATORY COMPLIANCE

A. Licensure. Each Partner shall maintain in good standing all licenses, registrations, and certifications required under 26 V.S.A. ch. 23, including any DEA registration, and shall promptly notify the Practice of any disciplinary action.

B. Vermont Corporate Practice Note. Vermont does not strictly enforce a Corporate Practice of Medicine prohibition; nevertheless, only individuals duly licensed under 26 V.S.A. ch. 23 shall direct clinical decision-making for the Practice.

C. Board of Medical Practice Reporting. Partners shall comply with mandatory reporting obligations under 26 V.S.A. § 1317 and Board rules.

D. HIPAA and Vermont Privacy. The Practice shall maintain HIPAA-compliant policies and observe Vermont's Patient Privilege under 12 V.S.A. § 1612.

8. COMPENSATION METHODOLOGY; FEE-SPLITTING SAFEGUARDS

A. Compensation. Each Partner shall receive base compensation and a productivity component as set forth on Schedule B.

B. Anti-Fee-Splitting Compliance. Compensation shall not constitute prohibited division of fees under 26 V.S.A. § 1354(a)(20) (unprofessional conduct — division of fees or agreeing to split or divide fees received for professional services for any person for bringing to or referring a patient). All compensation is based on bona fide professional services rendered by the Partner.

C. Federal Compliance. Compensation shall comply with the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b) and Stark Law (42 U.S.C. § 1395nn), including the bona fide employment, in-office ancillary services, and personal-services-arrangement safe harbors where applicable.

9. BOOKS, RECORDS, AND ACCOUNTING

A. Maintained at the Practice's principal office; available for Partner inspection upon reasonable notice.
B. Annual audit or review by [CPA FIRM].
C. Tax returns prepared by [TAX PREPARER].

10. BANKING AND SPENDING AUTHORITY

A. Practice accounts at [BANK]; signatories as designated by Partner vote.
B. Single-transaction spending limits: Managing Partner [$____]; above that requires majority consent.

11. PARTNER DUTIES; OUTSIDE ACTIVITIES

A. Full-Time Commitment. Each Partner shall devote at least [____] clinical hours per week to the Practice.
B. Outside Activities. Disclosed to and approved by the Partners; no Partner shall engage in a competing medical practice within the Restricted Area while a Partner.
C. Fiduciary Duties. Each Partner owes the Practice and co-Partners duties of loyalty and care.

12. ADMISSION, WITHDRAWAL, AND BUY-SELL

A. Admission. Unanimous consent; minimum vesting period [____] years before full Partnership Interest.

B. Voluntary Withdrawal. [____] months' written notice required.

C. Mandatory Buy-Out Triggers.

D. Valuation. As provided in Schedule C; tie-broken by independent appraiser.

13. REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants that:
A. They hold an active, unrestricted Vermont medical license.
B. They are not the subject of pending disciplinary or governmental investigation.
C. They have not been excluded from any federal health-care program.
D. They have authority to enter this Agreement.

14. COVENANTS AND RESTRICTIVE COVENANTS

A. Confidentiality. Each Partner shall maintain confidentiality of patient information (HIPAA and 12 V.S.A. § 1612) and Practice trade secrets.

B. Non-Solicitation. For [____] months following withdrawal, no former Partner shall solicit Practice employees or actively divert Practice patients.

C. Non-Competition (Reasonableness Standard). For [____] months following withdrawal, no former Partner shall practice medicine within [____] miles of any Practice office.

D. Tail Coverage. Withdrawing Partner shall purchase malpractice "tail" coverage as provided in Section 17.

15. DEFAULT AND REMEDIES

A. Events of Default. Material breach uncured after [____] days; loss of license; bankruptcy; conviction of felony or crime of moral turpitude; act of professional misconduct.
B. Remedies. Specific performance, injunctive relief, expulsion under Section 12, and damages.

16. RISK ALLOCATION AND INDEMNIFICATION

A. Malpractice Indemnity. Each Partner shall indemnify the Practice and co-Partners against liability arising from such Partner's individual professional negligence to the extent not covered by insurance.

B. Practice Indemnity. The Practice shall indemnify each Partner against liability arising in the ordinary course of Practice business, excluding individual professional negligence and willful misconduct.

C. Statutory Cap Awareness. The Partners acknowledge Vermont's medical-malpractice framework under 12 V.S.A. ch. 215 and the informed-consent provisions of 12 V.S.A. § 1909.

17. INSURANCE REQUIREMENTS

18. DISPUTE RESOLUTION

A. Negotiation. Good-faith discussions among Partners for [____] days.
B. Mediation. Required prior to litigation; held in [COUNTY, VT].
C. Arbitration (Optional). ☐ Binding arbitration under AAA Commercial Rules in [LOCATION, VT].
D. Forum. If litigated, Vermont Superior Court for [COUNTY] County.
E. Governing Law. Vermont law governs.

19. GENERAL PROVISIONS

A. Notices. Written, to addresses on Schedule A.
B. Assignment. No Partner may assign Partnership Interest without unanimous consent.
C. Amendment. Only by writing signed by all Partners.
D. Severability. Invalid provisions severable; remainder enforceable.
E. Entire Agreement. Supersedes prior agreements.
F. Counterparts; Electronic Signatures. Permitted under Vermont's Uniform Electronic Transactions Act, 9 V.S.A. ch. 20.

20. EXECUTION BLOCK

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

Schedules:
☐ Schedule A — Partners, Addresses, and Initial Contributions
☐ Schedule B — Compensation Methodology
☐ Schedule C — Valuation Methodology

SOURCES AND REFERENCES

• 11A V.S.A. (Vermont Business Corporation Act) — https://legislature.vermont.gov/statutes/title/11A
• 11 V.S.A. ch. 25 (Vermont LLC Act) — https://legislature.vermont.gov/statutes/chapter/11/025
• 26 V.S.A. ch. 23 (Medical Practice Act) — https://legislature.vermont.gov/statutes/fullchapter/26/023
• 26 V.S.A. § 1354 (Unprofessional conduct) — https://legislature.vermont.gov/statutes/section/26/023/01354
• 12 V.S.A. ch. 215 (Medical Malpractice) — https://legislature.vermont.gov/statutes/chapter/12/215
• 12 V.S.A. § 1909 (Informed Consent) — https://legislature.vermont.gov/statutes/section/12/081/01909
• Vermont Board of Medical Practice — https://www.healthvermont.gov/health-professionals-systems/board-medical-practice