When forming your dental practice, there are several choices in structuring your business:
- Sole Proprietorship
- Professional Limited Liability Company
The sole proprietorship is the most simple and least complex option. The dentist simply conducts business in his or her name and uses their social security number for tax purposes. If you use a practice name, you denote such as DBA meaning “doing business as.” The disadvantage of a sole proprietorship includes personal liability for business actions including business debts. Therefore, it is common for dentists to form corporations or professional limited liability companies.
Consult a certified public accountant for tax advice. You also need a financial planner.
We can assist you with your partnership agreement. Never rely on oral communications or a vague template you found on the Internet. We will spend time with you to determine the roles and responsibilities of the partners. PLLCs refer to this as an Operating Agreement.
A good understanding of what the terms in the agreement actually mean and how it affects your ownership interest is critical especially if you end up “divorcing” your business partner. Now that’s another topic in itself…you may go into business thinking this is a forever venture into the world of success and profitability, but the reality is, you need a backup plan in case it does not work out. It’s much easier to go into business with other individuals, but very difficult to get out of it. We will make sure you have a solid plan for the future.
We spend time with you to determine the roles and responsibilities of the partners. PLLCs refer to this as an Operating Agreement. Having a good understanding and capturing these responsibilities in writing contributes to a healthy business relationship. Preserve your friendship and maintain your agreements in writing.
Are you looking for space or assuming a lease? We can review your lease agreement to ensure the terms meet your needs to avoid disappointment and costly litigation.
A common lease that comes across our desk is the Triple Net Lease. A triple net lease includes the expense categories of real property taxes, insurance, and maintenance as additional rent. We negotiate the terms to allow our clients the right to audit the landlord’s operating expenses under this lease arrangement.
Additionally, we suggest caution when accepting Common Area Maintenance (CAM) fees. This too is considered additional rent. Once again, the tenant should have the right to review the documentation for all fees charged. Typically, the CAM fees increase and so it’s a good idea to negotiate a maximum amount or “cap”.
Evaluate whether you are being charged for operational or management costs tucked into “administrative fees”. This may be an option that can be either negotiated or stricken.
Determine whether you are assuming responsibility for the HVAC. This can be very costly if you are assuming the responsibility to pay for all the costs associated with the HVAC. Annual caps for tenants limit the number of costs you incur for HVAC maintenance, repair, and replacement.
You also want the freedom to assign the lease in the event you sell your practice. What if the building is sold? Negotiate the first option to purchase.
Inquire about signage. If signage is limited, potential patients may not be able to find your office.
As you can see, the list of terms can be exhausting. That’s why you need a lawyer who is looking after your interests.
Employment Contracts (Associate Dentists)
If your practice is growing and you need more dentists, we can assist you with professional employment contracts. We will address terms such as length of employment, compensation, CE expenses, license renewal, management responsibilities, buy-in opportunities and most importantly, restrictive covenants.
The strength of your dental practice comes from having the right people in place. Let’s face it – you can’t practice dentistry by yourself! Finding the right people, conducting background checks, providing job descriptions and setting the foundation with an Employer’s Handbook is essential to your successful practice management.
No one wants to deal with a complaint supported by the Department of Labor or EEOC. Common pitfalls for dentists:
- incorrectly classifying hygienists as independent contractors
- incorrectly classifying employees as salary exempt and not paying overtime
- lacking a complaint procedure for discrimination claims
- having different rules for different employees.
Keep in mind the Americans with Disability Act applies on a federal level when you have 15 or more employees. The Tennessee Human Rights Act applies to employers with 8 or more employees. Kentucky Civil Rights Act applies to smaller employers between 8 and 14 employees. A solid handbook contributes to your defense if a dispute arises.
Unlike online programs where you build your handbook using a template, we provide one on one consulting in order to develop the handbook that suits the needs of your practice. In this manner, you’re not paying for your handbook over and over again each year but rather you have the opportunity to update it when it’s necessary.
Nothing can be more stressful than having to deal with a regulatory compliance complaint or an allegation of a violation. Whether it’s OSHA or the dental board, we are here to help you.
Asset Purchase Agreement
If you are ready to sell your dental practice, we will work closely with a valuation expert to price your practice and prepare the Asset Purchase Agreement. We will address retention of existing employees, a restrictive covenant, the property lease or purchase of real estate, and existing accounts receivable.
Compliance Training & Policy Development
Training services are not available through the law practice. Please visit DentalComplianceTN.com for training, inspections, and policy development information.
Estate Planning for Dentists
You made it through dental school, you worked hard in your practice, and now you are enjoying a successful career. Get the peace of mind you want and protect your assets and the legacy you plan to hand down to your family.
Last Will and Testament
If you do not have a will, your property will be distributed according to Tennessee law. You may not agree to this succession particularly if you have a blended family. If you have minor children or a chemically dependent child, it may best serve your needs to consider a Revocable or Irrevocable Trust with special contingencies.
Wills are probated and are public court records. If confidentiality is your concern as well as the avoidance of probate expenses, we can assist you with trust planning. We provide both Revocable Trusts and Irrevocable Trusts. There are federal estate tax advantages with Irrevocable Trusts and we are happy to work closely with your financial planner and CPA.
In Tennessee, there are only 2 years allowed to wind up a dental practice when a practicing dentist dies. Not having a solid plan in place may negatively impact the value of your practice. Reduce added expenses and the resulting stress on your loved ones by having a solid plan in place.
Durable Power of Attorney and Health Care Power of Attorney
Not having power of attorney documents may result in a conservatorship action if the dentist loses capacity. Save thousands of dollars and court intervention by having these important documents in place. Designate your trusted person(s) to make financial and healthcare decisions if you cannot make decisions for yourself. Please review the Estate Planning link for further details.
Power of Attorney for Care of a Minor Child
This free form provided by the state of Tennessee for parents or the legal guardian to authorize a caregiver to consent to medical and dental treatment may be very helpful in your practice. Click here for the link to form.