How do I run a dental practice in California? What business structure should I consider for my California dental practice? What licenses and permits do I need for my California dental practice? What type of employment contract should I put together for my California dental practice? What type of insurance do I need for my California dental practice?
If you're looking to either start or run a dental practice in California, there is a lot to know. The way you structure your business has everything to do with the coverage of your practice and your employees receive. There is also a pile of licenses and certifications required, but all, in the end, to not only protect your patients and your employees but you as a business owner.
If you're considering starting a California dental practice, you will also need to consider how your employee contracts are structured, as well as the type of insurance coverage you will purchase. Just remember, there's a light at the end of the tunnel where you can successfully run a California dental practice!
California Dental Practice Business Structure
As a California-licensed dentist, you may practice under either a sole proprietorship, professional C-Corp, professional S-Corp, or a general partnership. LLCs and LLPs do not have the authority to perform professional services in California, as they are general partnerships that elect to be treated by registering with the Secretary of State. In California, only attorneys, architects, and accountants can operate their practices as LLPs.
A sole proprietorship consists of an individual not forming a separate entity for their practice of dentistry but operating as an individual in the capacity of an associate dentist or owner of a dental practice. This does not require any formal documentation, as it is the simplest version of the business.
General partnerships are entities through which two or more dentists co-operate a dental practice in California. You share general overhead expenses, such as property payments, employee/contractor payouts, facility maintenance, technical equipment, etc.. Dental partnerships typically consist of two scenarios:
1. A dentist owns a dental practice as either a corporation or sole proprietor and wants to sell part of their practice to another dentist, which will result in entering into a general partnership.
2. Two or more dentists start a dental practice or acquire an existing practice as individual partners in a general partnership or a general partnership of corporations.
If you are looking to corporate your California dental practice, either with an S-Corp or C-Corp, you will receive fringe benefits. All dental corporations in California must be professional corporations and cannot be general corporations. All California corporations are initially type C unless a dentist elects to have the corporation be an S-Corp by filing a separate form with the IRS within 75 days of the formation of the corporation. Generally, filing as an S-Corp is preferred because your dental practice will not have to undergo separate levels of taxation both at the corporate and individual stockholder levels.
California Dental Practice Licenses and Permits
There are not only licenses related to medical practice required, but certifications and licenses to run your practice. The following licenses and permits are required by the California Dental Board:
- Dental License
- Additional Office
- Conscious Sedation
- Extramural Dental Facility
- Elective Facial Cosmetic Surgery
- General Anesthesia
- Oral Conscious Sedation
- Oral Conscious Sedation for Minor Patients
- Oral and Maxillofacial Surgery
- Mobile/portable Dental Clinic
- Referral Services
- Additional specialty permits, as necessary
The following licenses and permits are required to open a practice in the state of California:
- Building and/or zoning permits
- Business license
- Business property
- Corporation
- Fictitious business name
- Air tank and compressor
- Outdoor building sign
- Wastewater
- Medical waste
- Hazardous waste
- DEA number
- Controlled Substance Utilization Review (CURES/) database registry
- Clinical Laboratory Improvement Amendments (CLIA/) registry
- NPI number
- Seller's permits
- Use Tax registration
- Radiation machine registration
- Employer
- Employment of Independent Contractors
California Dental Practice Employee Contracts
You will need to create an employment agreement with your employees, whether they are full-time, part-time, or per diem. Creating a detailed written agreement defining the relationship with your associate can prevent expensive courses of action over disagreements. Make sure your contract covers the following agreements:
- Classify the employee as either an employee or an independent contractor.
- Identify compensation amount, method, and timing of payment.
- Identify benefits, such as sick pay (California requirement/), vacation, health coverage, and retirement. Remember, California state law requires workers' compensation coverage by a dental practice if there are employees. An employee health care plan is an optional benefit.
- Identify which expenses are reimbursable and responsible by the employee/independent contractor.
- List general duties.
- Indicate full- or part-time status.
- Identify termination requirements.
- Note allocation of legal liability between you and the employee/independent contractor.
- Identify any other rights and/or obligations by the employee/independent contractor.
This contract should be filed away and kept for record-keeping. Make sure you and your employees work by the contract, and lines are blurred, so you can all work according to California state law.
Running a California dental practice is more than getting patients, it's following the laws that apply to the industry and the state's business standards. Dental practices can be extremely profitable in California - just make sure you keep track of all of your expenses and provide the best care you possibly can, and you'll have no issue seeing a return on your investment.
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