Lawyer for Dentists, Dental
Corporations and Group Dental Practices
By Matt Dickstein
Legal compliance checklist
for a dental corporation
Thank you for finding my suite of articles on
the basic corporate, business and contract law issues for
dental corporations and group dental practices in
California. The articles in this suite are:
In my last article, I ask the threshold
question,
Should
you incorporate your dental practice?
In this article I give you a legal compliance
checklist for your dental corporation. Incorporating a
dental practice can feel overwhelming. There are so many
unknowns to cause you anxiety. I write this checklist to
fill in the unknown. This checklist gives you a bird’s eye
view of legal compliance for your start-up dental
corporation.
Let's start at the beginning -
incorporation.
Form the Dental
Corporation. Your basic choices are a C
corporation or an S corporation (you may not use an LLC for
a dental practice). The law is tricky for dental
corporations, so use an attorney who knows dental
corporation law to draft your corporate documents (articles,
bylaws, stock certificates, etc.). For related
information on who can own a dental practice, see my
article,
How a non-licensed person can work with a dental
practice, including the use of an administrative /
management service company.
Fictitious Name
Permit. A
fictitious name is a dba or some name other than the dental
corporation’s legal name. In most cases, you must obtain a
fictitious name permit from the Dental Board. You also
might need a separate fictitious name filing with your local
county recorder’s office.
Shareholders /
Buy-Sell Agreement. If your practice has more
than one owner / dentist, seriously consider getting a
shareholders / buy-sell agreement to govern your
relationship with your partners. These agreements save you
a lot of money if partner relations go bad. A buy-sell
agreement resolves disputes between the partners, including
exit provisions if the partners can’t work together
anymore. I call this the partners’ economic divorce. For more
info, see my article -
Shareholder
buy-sell
agreements for dental corporations.
Get a Federal
Employer Identification Number (EIN). You can call the IRS for your EIN or get it from the
IRS’ website.
Bank Accounts.
Once you have the articles of incorporation plus EIN, you
can open bank accounts.
Choose a Location.
First decide on a general location, then check local zoning
requirements to be sure you can operate a dental practice
there. Visit your local planning / permits department for
this and other local requirements for your location.
Real Property Lease.
One of the most important contracts you’ll sign is the lease
for your offices. The lease will bind you for years to
come, and you’ll have to continue paying rent even if the
practice doesn’t perform well. This is another area where
you need a lawyer.
Trademarks.
If your dental
practice will rely on a special business name or trademark
(e.g. "Smiles Dental"), find out if anyone else has prior
rights to use the business name. Search the internet to see
if anyone is using your name for a dental practice within
your geographic scope. Your geographic scope relates to how
far you look for patients. If your internet searches come up
clean, consider getting a trademark on your name. If your
searches show problems, talk to a lawyer about what to do
next.
Local Business
License. Get a
license to do business from your city.
Seller’s Permit.
If you sell merchandise, get a seller’s permit from the
California State Board of Equalization.
Employer Filings and Withholdings.
If you have employees, file form DE-1 with California EDD.
This starts the never-ending process of employment law
compliance. Hire a payroll company to handle your employee
wage withholdings. Read
Classifying a dentist as an employee or contractor
to understand this aspect of legal compliance.
Workers Compensation and Other
Insurance. Once you have
employees, get an insurance broker for workers compensation
insurance. Workers comp is required by law.
Use an experienced
broker to purchase your professional malpractice insurance.
See,
Reduce your personal liability from your business to learn how to
protect your personal assets from business risks.
That’s it for this bird’s eye view of the start-up of your
dental corporation. I hope this checklist has been helpful
to you.
Call me to schedule a
legal consultation: 510-796-9144
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