Dentistry is a highly regulated industry. Choosing the correct corporate entity for a dental practice is not just a matter of preference but often a legal necessity.
At Wood & Morgan, we guide dentists through the statutes and regulations governing dental practice formation.
Our dental corporate formations lawyers show dentists how to comply with all relevant laws and protect themselves from legal challenges, maximizing the benefits of corporate formation.
Why Choose Us for Your Dental Corporation Formation?
At Wood & Morgan, we guide dental professionals through the complexities of corporate formations. With over 30 years of industry-specific experience, we ensure your business structure protects your interests and aligns with your goals.
We offer comprehensive legal support to safeguard your assets and set your practice up for long-term success in forming a limited liability company (LLC), exploring limited liability protection, or drafting a partnership agreement.
Our team understands the unique challenges dental professionals face.
We provide strategic solutions to help you avoid pitfalls, navigate intricate regulations, and select the correct entity.
Partner with Wood & Morgan for trusted guidance and a customized approach to achieving your professional ambitions.
Navigating Legal Requirements and Entity Formation
If you are a dentist, you know how complex and challenging the legal aspects of your profession can be. You must follow specific rules and regulations that affect your business structure.
You can’t use standard options like LLCs, LLPs, or corporations in some states for your dental practice. That’s one reason you need our firm’s guidance in choosing the correct legal entity for your situation.
Our dental business attorneys don’t just ensure you comply with the state Dental Board requirements. We also protect your personal and professional assets from lawsuits and tax liabilities.
We understand that a wrong or careless decision can expose you to serious risks and consequences. That’s why we offer a comprehensive, customized solution that meets your needs and goals.
Forming Your Dental Practice
Taking purposeful steps from the start sets your practice up for success. You should choose the proper business structure, such as forming a limited liability company (LLC), before you do anything else to secure limited liability protection for your assets.
Registering your practice’s business name and filing an assumed name certificate is essential to establishing your legal entity. Securing a location, whether you purchase or lease, involves drafting legally sound agreements and contracts tailored to protect your interests.
Choosing the Right Business Structure for Corporate Formations
The business structure significantly impacts a dentist’s liability, tax obligations, and operational flexibility.
The common structures for dental practices include:
Sole Proprietorship (DBA)
A sole proprietorship, also known as doing business as (DBA), is one of the simplest forms of business entity for individual dental practitioners.
Due to its ease of setup and minimal regulatory requirements, dental professionals often favor this structure in solo practice.
In a sole proprietorship, the dentist and the dental practice are legally considered the same entity.
One of the primary advantages of a sole proprietorship is the complete control it offers. The dentist has the autonomy to make all business decisions, which can lead to streamlined operations and quick decision-making.
Additionally, the financial setup is straightforward, as all practice income and expenses are directly reported on the dentist’s tax return, potentially simplifying tax preparations.
However, a significant drawback of this entity is the lack of personal liability protection. In a sole proprietorship, the dentist’s assets can be at risk in the event of business debts or legal judgments.
If the practice faces a lawsuit or incurs substantial debt, the dentist’s personal property and finances might be tapped to satisfy these obligations.
While the simplicity and control of a sole proprietorship are attractive to dentists, they must carefully consider the potential risks associated with this business structure.
Professional Limited Liability Company (PLLC)
A Professional Limited Liability Company (PLLC) is a specialized form of LLC designed for licensed professionals, including dentists. Available in some states, a PLLC provides a blend of liability protection and operational flexibility.
Unlike a sole proprietorship, this structure protects the dentist’s assets from the practice’s liabilities, such as business debts or malpractice lawsuits. This separation is essential for dentists seeking to protect their finances from business-related risks.
PLLCs also offer tax advantages. They typically allow for pass-through taxation, where the business’s profits and losses are passed directly to the dentist’s tax return, avoiding the double taxation that can occur in other corporate structures.
This structure can also be less burdensome administratively compared to a traditional corporation, as it often requires less paperwork and formalities.
However, it’s important to note that the rules and availability of PLLCs can vary by state, and dentists must ensure that forming a PLLC complies with their state’s regulations governing professional practices.
Professional Corporation
A Professional Corporation (PC) is a corporate structure designed for licensed professionals, including dentists. This entity is particularly suitable for single dentists. The dentist’s income differs from the practice’s profits and revenue, offering liability protection and tax advantages.
One key advantage of a professional corporation is the separation of personal and business finances. This structure also protects dentists’ assets against business liabilities if they properly maintain corporate formalities and separation.
From a tax perspective, professional corporations can offer several benefits. They can provide more opportunities for tax planning compared to sole proprietorships or PLLCs. For example, the dentist may take advantage of certain corporate tax deductions, potentially reducing the overall tax burden.
Additionally, professional corporations can have caps on self-employment taxes, which can be advantageous compared to other business structures.
However, professional corporations require adherence to more formalities and can involve more paperwork, including the need for formal annual meetings and compliance with specific corporate governance rules.
They may also be subject to corporate franchise taxes, adding to the operational costs.
Each of these structures has unique advantages and limitations. We help dentists understand these nuances and choose the structure best suited for their professional goals and personal circumstances.
Choosing the proper business structure is crucial to protect personal assets and ensure legal and financial stability. Options like a limited liability company (LLC) or a professional services corporation offer limited liability protection, shielding business owners from being held personally liable for debts.
On the other hand, sole proprietors and general partners are personally liable, adding higher risk to their business activities. Corporations, such as S corporations or C corporations, provide additional benefits like lower corporate tax rates and the ability to raise money, but they may involve double taxation or stricter organizational rules.
Business owners must also consider tax treatments, such as self-employment taxes, corporate income, and general tax status, which must align with regulations set by the Internal Revenue Service (IRS) and the Internal Revenue Code.
Dental professionals can leverage precise corporate formations and partnership agreements to distribute profits efficiently, mitigate unlimited liability, and eventually sell or grow their practice while complying with state-level rules, including filing an assumed name certificate.
How Our Dental Business Lawyers Help in Your Corporate Formations
Our dental attorneys at Wood & Morgan bring decades of experience in forming and structuring dental practices. We assist dentists in understanding their legal options, completing required paperwork, and ensuring compliance with local, state, and federal laws.
We make dental business formation efficient, effective, and legally sound, allowing our clients to focus on what they do best – providing excellent dental care. Ensure your business structure is optimized to help you manage responsibilities like how you pay self-employment taxes while protecting your financial future.
Talk to an Experienced Dental Corporate Formations Lawyer Today
Forming a dental practice is a significant step in a dentist’s professional journey. With Wood & Morgan, dentists can embark on this venture with the confidence of experienced legal professionals guiding them every step of the way.
Call us today at 866-307-3341 today to ensure your practice is on a solid legal and regulatory foundation.