Form a California Dental Corporation- Secure your Practice (2024 Update)

Dental Corporation FAQ's

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How to start a dental corporation

In California, practicing as a professional California dental corporation may bestow you with many benefits over practicing as a sole proprietor or dental partnership.

Formed under the  Moscone-Knox Professional Corporation Act, a professional corporation in California is entitled to render dental services that are pursuant to a license, certification, or registration authorized by the general provisions of the California Corporations Code.

Unlike other states, California does not allow for dentists (or other professionals) to operate as an LLC or a Professional LLC.

With that being said, the California Dental Corporation is the only entity a dentist can have to shield themselves from personal lability. 

California Dental Corporation

How to Start a California Dental Corporation (8 Steps)

  1. File Articles of Incorporation with the Secretary of State
  2. Draft custom Dental Corporation Bylaws
  3. Conduct initial corporate meeting where you will issue share and elect officers and directors
  4. File initial statement of information
  5. Obtain an EIN number (Tax ID)
  6. If applicable, elect to be treated as an S-Corp with the IRS
  7. Open up a new corporate bank account
  8. Register with the Dental Board of California

Frequently Asked Questions When Forning a California Dental Corporation

Here is a whittled list of a few benefits of incorporating a professional dental practice in accordance with the California corporation act.

  1. Limits personal liability of dentists against creditors and lawsuits
  2. Allows you to build corporate business credit which may allow you to avoid a personal guarantee
  3. Minimizes the self-employment taxes of shareholders (If you elect S-Corp Treatment)
  4. Ability to opt into fringe benefits such as medicare, retirement plans and more

A Dental Corporation’s Bylaws are the rules under which a corporation can operate.  They dictate the corporation’s internal business and layout rules and procedures for all of its affairs.

The board of directors or shareholders may add, remove, or change provisions of the bylaws upon a satisfactory vote.

Unless there are less than three shareholders, a Dental Corporation Bylaws must have at least three directors. It is very common for dental corporations in California to have only a single shareholder, in which case they are only required to have one director.

Many California Dental Corporations are owned by a single shareholder. 

In this situation, a sole shareholder Dental Corporation must:

  • Be owned by a person licensed to practice dentistry in California; and
  • Serve as both president and treasurer
  • The other corporate officers are not required to be licensed to practice dentistry. [see California Corp. Code § 13403].

Generally, a professional corporation normally is limited to rendering professional services in only one profession. It’s shareholders, directors, and officers must be licensed in the profession the corporation is to practice.

However, California dental corporations may have shareholders, officers, directors, or professional employees who are licensed in specified similar professions and who may provide services in their own professions.

They must, however, meet the following two requirements:

  1. The members of these similar professions cannot own more than 49 percent of the total stock of the California dental corporation.
  2. The non-dentist owners cannot outnumber the licensed dentists in the corporation.

The professionals listed below are eligible to take hold of a California dental corporation provided they follow the two rules listed above:

  • Registered dental assistants
  • Accredited dental assistants in extended functions
  • Dental hygienists in extended functions
  • Registered dental hygienists in alternative practice
  • Licensed and certified physicians
  • Licensed surgeons

As a general rule, the names of professional corporations must reflect 1) the nature of the professional practice in which the corporation will engage; and 2) the name of the professional who owns the corporation.

Most professional corporation names must contain and be restricted to the last name of one or more of the present, prospective, or former shareholders or of persons who were associated with a predecessor person, partnership, or other organization and must include wording or abbreviations denoting the corporate existence such as “Professional Corporation,” “Prof. Corp.,” “Corporation,” “Corp.,” “Incorporated,” or “Inc.” Bus. & Prof. Code §§ 1054 .

Acceptable Names For A  California Dental Corporation:

Any name that complies with either one of the following:

  1. Any name that contains (and is restricted) to one or more persons’ name(s) or last name(s) and the words “dental corporation” or other words or abbreviations denoting corporate existence. (Their name may also be preceded by “Dr.”).
  2. A persons’ name may include one or more initials indicating a dental degree such as D.D.S., D.D.S., D.M.D., B.D.S or “Dentist.” If one of the noted a dental degree is included in the name, they may also add additional non-dental degrees such as M.P.H., P.H.D., M.S., and M.D.S.


  1. Any name that contains the family name of one or more of the past, present, or prospective associates, partners, shareholders or members and the words “dental office,” “dental practice” or “dental group.”


In summary, The name of a dental corporation name must contain:

  1. The last name of one of the shareholders.
  2. An indicator that the corporation is a dental related (either the word “dentistry”, “dental” or initials from the owner dentist’s dental degree “DDS”, “DMD” etc..
  3. The word Corporation, or some abbreviation. Abbreviations can be “Prof. Corp.,” “Corporation,” “Professional Corporation,” “Corp.,” “Incorporated,” or “Inc.”
  • Odgers Dental Corporation
  • Odgers Dental Inc.
  • Odgers DDS Inc.
  • Odgers DDS Corp.
  • Odgers Dental Prof. Corp.

** We are using the name Odgers for demonstration purposes, When setting up a dental corporation you will use the dentist’s last name.

Every dentist who treats patients in California for profit under a fictitious name must file a fictitious business name statement [Bus. & Prof. Code § 17910].

They must file in the county in which they see patients as well as with the California Dental Board.

So what is a Fictitious Business Name?

According to Bus. & Prof. Code § 17900(b).(c), a Fictitious business name is one of the following:

  • Any name for the practice other than the last name of the owner dentist; or
  • A name that suggests that the practice has more owner dentists than there actually are.

Dental Corp taxed as a C-Corp (Default)

The total income of the dental corporation is taxable by the federal and state governments’ corporation tax rates. If there are any distributed dividends to shareholders, it must be reported, and this income will also be subjected to income taxes. This taxation of dividends is also commonly referred to as ‘double taxation’.

Dental Corp taxed as an S-Corp

(Elect after setting up corporation)

One common way to avoid this double taxation is to elect to be treated as an S-Corp, which allows for pass-through taxation. When dental corporations elect to be treated as an S-Corp, the dentist will pay himself or herself a reasonable salary and will take additional compensation in the form of an owner distribution or draw.

While the owner’s salary is subject to self-employment taxes, the draw distribution is not, Thus, the dentist will save the roughly 15% self-employment tax on all distributions taken as a draw.

A shareholder can readily transfer stock to the new owner if there are no shareholder agreement restrictions.

But, the ownership change must be made only to a licensed dentists or individuals permitted to own such shares in a Dental Corporation.

Currently, it takes roughly 1-2 weeks for the California Secretary of State to process an newly formed dental corporation.

The cost to set up a dental corporation varies by firm, however we charge a flat rate of $1500 that includes all secretary of state filing fees.

  1. Professional Articles of Incorporation
  2. Dental Specific Bylaws
  3. Organizational meeting minutes
  4. Dental Corp Share Certificates
  5. EIN Number (IRS Form SS4)
  6. Optional: S-Corp Election (IRS Form 2553
  7. Register Corp with Dental Board

Operating as a dental corporation in California is not merely about owning a business; it’s about leveraging a structure that is conducive to professional growth and stability. Dental corporations offer distinct advantages such as protecting personal assets from business liabilities, potential tax benefits, and compliance with state regulations specific to dental practices. These corporations are recognized entities that, when formed and managed correctly, can lead to prosperous and secure professional practices.

The intricacies of forming a dental corporation necessitate professional legal guidance. From ensuring accurate and compliant documentation to offering strategic advice on operational best practices, a law firm is an indispensable partner in this process. Legal experts can navigate the maze of regulations, assist in drafting essential agreements, and provide ongoing support for various corporate formalities. Their involvement could be the difference between a rocky start fraught with legal complications and a seamless launch of your professional entity.

S Corp vs. C Corp: Choosing the Right Structure for California Dental Corporations

When establishing a dental corporation in California, one critical decision is selecting the appropriate corporate structure. Two prevalent options are S Corporations (S Corps) and C Corporations (C Corps). Both offer distinct advantages and considerations, particularly concerning taxation, ownership, and operational requirements. Understanding the differences between an S Corp and a C Corp is essential for dentists looking to maximize their practice’s financial efficiency and legal compliance.

Note: When you set up your corporation it will be treated as a C Corp by default. In order to to be treated as an S-Corp you will need to file IRS Form 2553.

Overview of S Corporations and C Corporations:

  1. S Corporation (S Corp):

    • Taxation: S Corps are pass-through tax entities. They do not pay federal income taxes at the corporate level. Instead, the corporation’s profits and losses are passed through to shareholders, who report them on their personal tax returns. This structure avoids the double taxation often associated with C Corps.
    • Ownership Restrictions: S Corps have certain limitations. They cannot have more than 100 shareholders, and all shareholders must be U.S. citizens or residents. Additionally, S Corps can only have one class of stock, which can limit capital-raising efforts.
    • Formal Requirements: Like C Corps, S Corps are required to follow certain formalities, such as holding annual meetings, maintaining corporate minutes, and others.
  2. C Corporation (C Corp):

    • Taxation: C Corps are subject to corporate income tax. Profits are taxed when earned and taxed again when distributed to shareholders as dividends, creating a scenario commonly referred to as “double taxation.”
    • Ownership Flexibility: C Corps can have unlimited shareholders, multiple classes of stock, and no restrictions on foreign ownership. This flexibility makes it easier to raise capital and can be advantageous for a growing practice.
    • Employee Benefits: C Corps can offer a range of tax-deductible benefits to employees, potentially resulting in tax savings.

Making the Choice for Dental Corporations in California:

When deciding between an S Corp and a C Corp for a dental practice, several factors should be considered:

  • Tax Strategy: If maintaining a pass-through tax status is preferable to avoid double taxation, an S Corp may be more suitable. However, if the goal is to reinvest profits back into the practice without distributing them as dividends, a C Corp could be advantageous.

  • Future Growth and Investment: For dental practices planning significant expansion or seeking investment, the flexibility of a C Corp in terms of stock options and ownership might be more appealing.

  • Regulatory Compliance: Dental corporations in California must comply with specific regulations, including those set forth by the California Dental Board. It’s crucial to consider how each corporate structure impacts compliance and professional licensing.

  • Personal Liability and Asset Protection: Both S Corps and C Corps offer liability protection, safeguarding personal assets from business debts and liabilities. Evaluate the level of protection in the context of potential risks associated with dental practices.

Choosing between an S Corp and a C Corp is a pivotal decision that affects a dental corporation’s taxation, growth potential, and legal obligations.

Each has unique offerings that can align with different business strategies and goals. Consulting with a legal or financial advisor is strongly recommended to understand the implications for your specific situation fully.

By making an informed choice, you can position your dental corporation for operational success and financial health in California’s competitive landscape.

In Conclusion: 

Navigating the complexities of forming a California Dental Corporation can be a daunting journey, but it doesn’t have to be a road traveled alone. With the proper guidance, dentists can establish their practice on a solid foundation, ensuring compliance, financial efficiency, and a structure that supports growth and stability.

Throughout this guide, we’ve explored the critical steps in creating a dental corporation in California, from understanding the unique benefits that this business model offers to unraveling the legal prerequisites.

More than just a pathway to limited liability and tax advantages, forming a dental corporation is about setting the stage for your practice’s future success and longevity.

However, the process is fraught with potential pitfalls that can be costly and time-consuming without experienced guidance.

This is where the role of a dedicated dental law firm becomes invaluable.

Leveraging professional legal assistance not only helps in accurately navigating the formation process but also provides peace of mind that each step is handled with due diligence and expertise.

If you’re on the brink of this significant step in your professional journey, consider reaching out for a consultation. Our law firm specializes in assisting dentists like you to form their California Dental Corporations, ensuring a seamless, compliant, and strategic start. Your vision for a thriving dental practice is within reach, and it begins with the decision to build it on the right legal and operational framework.

To know more about the formation, management and termination of California professional Dental Corporation, schedule an appointment with the leading California dental attorney.