> ## Documentation Index > Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt > Use this file to discover all available pages before exploring further. # Step 5: Sign the agreement stack > The five core documents that bind an MSO and a PC into one business: what each does, and the order they get signed in. Five agreements turn two separate legal entities into a single operating business: the **management services agreement**, the **stock transfer restriction agreement**, **clinician employment agreements**, a **business associate agreement**, and an **IP/brand license**. Together they are called the agreement stack, and they are the part of the structure a regulator, an insurer, or an acquirer will read first. **This step requires a healthcare regulatory attorney licensed in your state.** Not a generalist corporate lawyer, and not a template. The MSA is the document that determines whether your structure survives a CPOM challenge, and its correct content differs materially between Oregon, California, New York, and Texas. See [Hire healthcare counsel](/guides/agreements/get-agreements-reviewed). ## What Meridian did Counsel drafted the stack over five weeks. Dr. Shah's own attorney reviewed the transfer restriction and employment agreements on her behalf. Both boards adopted written consents authorizing execution. Total legal cost: roughly \$28,000. ## The five documents ### 1. Management services agreement (MSA) **What it does:** Defines what the MSO provides to the PC, what the PC pays for it, and, critically, what the MSO does *not* control. The MSA is the center of the structure. It should specify the services in real detail (administrative support, non-clinical personnel, premises, equipment, information technology, billing and collection support, marketing, financial and accounting services), state the fee and how it is calculated, and carve out clinical authority explicitly: > Notwithstanding any other provision of this Agreement, \[MSO] shall not, and shall have no authority to, control, direct, or interfere with the professional medical judgment of \[PC] or its licensed personnel, including with respect to diagnosis, treatment, the selection of diagnostic tests, referrals, the number of patients seen, the time devoted to any patient, clinical staffing decisions, the ownership or content of patient medical records, or the assignment of diagnosis and procedure codes. That carve-out list is not generic. It tracks the specific functions the newest statutes name — California's SB 351, effective January 1, 2026, enumerates interference with professional judgment to include determining what diagnostic tests are appropriate, determining the need for referrals, being responsible for overall patient care, and setting how many patients a physician may see or how many hours they may work.1 **Where the risk concentrates:** the fee. See [Set the management fee](/guides/agreements/set-the-management-fee) and, for the drafting detail, [MSA clause anatomy](/reference/legal/msa-clause-anatomy). ### 2. Stock transfer restriction agreement **What it does:** Pre-wires what happens to the PC's shares when the clinician-owner dies, becomes disabled, loses their license, is excluded from federal programs, or leaves. Without it, a departure event freezes the entity that holds all your payer contracts. With it, the shares transfer to a designated successor licensee at a pre-agreed price on a defined trigger. This is the document most affected by recent legislation. Oregon's SB 951 restricts share-transfer arrangements as part of its limits on MSO control of professional medical entities.2 California's Attorney General has attacked friendly-PC stock-transfer and MSA-termination provisions in litigation. Draft against current law, not against a 2019 template. See [Draft the stock transfer restriction agreement](/guides/agreements/draft-stock-transfer-restriction). ### 3. Clinician employment agreements **What they do:** Employ the clinicians, including the friendly owner, in their practicing capacity, as employees of the **PC**, not the MSO. Standard content: compensation model, benefits, malpractice coverage (occurrence vs claims-made, and who pays for tail), duties, term, termination, and restrictive covenants. The restrictive covenants deserve attention, because the law moved. The FTC's Non-Compete Rule was vacated in 2024, the FTC dropped its appeals in September 2025, and the rule was formally removed from 16 C.F.R. Part 910 effective February 12, 2026, leaving noncompete regulation to the states.3 Several states now void physician noncompetes outright, including Oregon under SB 951 and California under SB 351. Check your state before including one. See [Draft clinician employment agreements](/guides/agreements/draft-clinician-employment-agreements). ### 4. Business associate agreement (BAA) **What it does:** Satisfies HIPAA. The PC is a covered entity. The MSO, which handles protected health information on the PC's behalf for billing, scheduling, and IT, is a **business associate**. A written BAA between them is required, and its required content is specified at 45 C.F.R. § 164.504(e).4 You will also need downstream BAAs with the MSO's own subcontractors: the EHR vendor, the clearinghouse, the billing service, the hosting provider. See [Put a BAA in place between MSO and PC](/guides/agreements/draft-a-baa). ### 5. IP and brand license **What it does:** Lets the PC operate under the MSO's brand. The MSO owns the trademark; the PC gets a license to use it in connection with the practice. Often folded into the MSA, but a separate agreement is cleaner, especially when you add PCs in other states that will all license the same brand. ## The order they get signed in The sequence matters because several documents reference each other. Nothing can be signed before this. The PC's board authorizes entering the MSA; the MSO's members or board do the same. These consents are the evidence that both entities acted independently. Signed at or immediately after share issuance, so the restrictive legend on the certificate has something to reference. The main event. Effective date should align with when services actually begin. Referenced by the MSA if separate. Must be in place before the MSO touches any PHI, that is, before the first patient. Including the friendly owner's. Signed before the first day of clinical work. With the EHR, clearinghouse, and any billing vendor, before go-live. ## The independence test Here is a useful way to sanity-check the stack before signing. Ask: **if the MSO and the PC were genuinely unrelated parties negotiating at arm's length, would this document look like this?** * Would an unrelated practice agree to pay this fee for these services? * Would an unrelated practice give up this much control? * Would an unrelated clinician sign this share transfer at this price? * Is there a termination right that actually works for both sides? Where the answer is clearly no, you have found the clause a regulator will find too. ## Your artifact from this step * Executed MSA * Executed stock transfer restriction agreement, with legend on the certificate * Executed clinician employment agreements * Executed BAA (and a running BAA inventory) * Executed IP license * Board and member consents for both entities, filed in the minute books * A calendared refresh date, the stack should be reviewed annually, and immediately whenever your state's law changes ## Checklist * [ ] Healthcare regulatory counsel engaged and state-specific * [ ] Clinician-owner represented by independent counsel * [ ] Board and member consents adopted by both entities * [ ] All five agreements executed in order * [ ] Clinical carve-out language reviewed against your state's current statute * [ ] Fee structure checked against your state's fee-splitting rules * [ ] Noncompete provisions checked against current state law * [ ] BAA inventory started * [ ] Annual review date calendared ## Next The identifiers every payer will ask for, and the profile they'll pull from. ## Sources 1. Cal. S.B. 351 (2025), effective January 1, 2026. Summary of enumerated prohibitions: Benesch, [California Enacts SB 351](https://www.beneschlaw.com/insight/california-enacts-sb-351-new-restrictions-on-private-equity-and-hedge-fund-involvement-in-physician-and-dental-practices/). 2. Or. S.B. 951 (2025 Reg. Sess.). [Enrolled bill](https://olis.oregonlegislature.gov/liz/2025r1/Downloads/MeasureDocument/SB951). 3. FTC, [Federal Trade Commission Files to Accede to Vacatur of Non-Compete Clause Rule](https://www.ftc.gov/news-events/news/press-releases/2025/09/federal-trade-commission-files-accede-vacatur-non-compete-clause-rule) (Sept. 5, 2025); removal of 16 C.F.R. pt. 910 effective Feb. 12, 2026, [91 Fed. Reg. (Feb. 12, 2026)](https://www.federalregister.gov/documents/2026/02/12/2026-02866/revision-of-the-negative-option-rule-withdrawal-of-the-cars-rule-removal-of-the-non-compete-rule-to). 4. 45 C.F.R. § 164.504(e). [eCFR](https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-C/part-164/subpart-E/section-164.504). ## Related topics - [Draft the management services agreement (MSA)](/guides/agreements/draft-a-management-services-agreement.md) - [Set the management fee](/guides/agreements/set-the-management-fee.md) - [Hire healthcare counsel (and use them well)](/guides/agreements/get-agreements-reviewed.md) - [What an MSO can and can't do](/concepts/model/what-msos-can-and-cant-do.md) - [Fee-splitting rules, explained](/concepts/model/fee-splitting.md) - [MSA clause anatomy](/reference/legal/msa-clause-anatomy.md) - [The complete agreement stack (checklist)](/reference/legal/agreement-stack-checklist.md)