Are you receiving the best legal advice?

An area of increasing concern in modern dentistry is that of ownership; with so many different options, which is the right one for your practice?

Historically, the only legal way that dental practices could be owned was under either individual ownership or by a partnership. Though there were a few dental corporates in existence this is a relatively new phenomenon. Laws were changed in 2006 to allow dental practices to become limited companies and since then we have seen an increasing number of incorporated dental practices popping up.

However, the idea of incorporation brings with it a plethora of legal requirements which must be successfully negotiated and can only be done so with advice from a reliable legal firm. The significance of comprehensive legal advice in this situation can not be underestimated. Without access to well informed guidance, a dental professional will be left exposed to complications that can be difficult to break free from.

These problems are often the result of confusion or the practice owner being misinformed as to what the requirements are to incorporate a dental practice. The legal position on allowing dentists to incorporate is that a non-dental professional can own shares in the company (which can be as much as 100 per cent), but the law states that at least half of the directors of the company must be registered with the GDC. For example, you could have a husband and wife run the practice as a limited company. This scenario is perfectly lawful as at least 50 per cent of the directors of the company are dental professionals. A dental practice with a majority of non-dental professional directors will not be lawful and in fact, is a criminal offence.

Though accountants may be under the impression that by suggesting their client incorporates they are doing them a huge favour and saving them a lot of money, the reality is that their lack of knowledge of dental regulations may cost their client much more, and not just financially!

Usually problems will occur as the result of advice from accountants or lawyers who do not have a good understanding of the dental industry.

The ownership of a limited company can be contrasted with a situation where partners or expense sharers are the principals and where, for a partnership to be legitimate, all partners must be registered dental professionals. A partnership consisting of individuals not registered with the GDC is not only unlawful; it is also a criminal offence. By trading unlawfully a dentist can get himself or herself into trouble with the GDC and will run the risk of being prosecuted.

The dental industry possesses its own unique characteristics and regulations that make it quite distinct from other professions. It is for this reason that when deciding upon your business structure, the advice of a qualified and experienced specialist is sought. Whether searching for an accountant or a solicitor, the very best advice can only be obtained from a specialist who has a firm understanding of dentistry’s legal demands. By seeking advice from someone who lacks a sufficient understanding of the industry, the dental professional is running the risk of problems developing which can jeopardise the future of their practice.

There are a number of specialist legal firms operating in the UK and although using any specialist is better than no specialist, it is still important to search for a firm of distinction. It is worth looking for a legal firm that is a member of either NASDAL (National Association of Specialist Dental Accountants and Lawyers) or ASPD (Association of Specialist Providers to Dentists), Goodman Grant is a specialist legal firm that is a member of both organisations and its solicitors have a combined experience of more than 75 years.

A lot of the time the problem of unlawful ownership goes unnoticed. However, it is now becoming an increasingly common problem. This is because it is only when the owner is looking to sell that their flawed incorporation forms a barrier preventing them from doing so. With the ability to incorporate having been introduced seven years ago, for many the time has now come to sell, only to discover that they can’t. This problem is quite difficult to fix and can be costly. The irony is that to have sorted it out properly in the first place would not have been expensive, nor would it have been difficult with the right help.


John Grant of Goodman Grant Lawyers for Dentists

For more information call John on 0113 8343705 or email [email protected] or click below to book your free legal consultation 





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