If you are a dentist in California looking to start your own practice, forming a Professional Corporation (PC) is the best way to ensure legal compliance, protect your assets, and operate your business efficiently. Unlike general corporations or LLCs, California law requires dentists to structure their practice as a Professional Corporation, following strict regulations set by the Dental Board of California.
This guide will walk you through the step-by-step process for forming a Professional Corporation for dentists in California, covering legal requirements, licensing, and compliance obligations.
1. Choose a Name for Your Dental Corporation
The first step in forming a Professional Corporation is selecting a name that complies with California’s corporate naming requirements.
- The name must include “Dental Corporation” or “Professional Dental Corporation.”
- It cannot be misleading or imply services beyond dentistry.
- It must be unique and not already registered with the California Secretary of State.
- It should match the name on your dental license or include your last name if branding under a personal name.
To check name availability, visit the California Secretary of State’s business name database and confirm your name is not already taken.
2. File Articles of Incorporation with the California Secretary of State
To officially establish your Professional Corporation, you must file Articles of Incorporation (Form ARTS-PC) with the California Secretary of State.
- The filing fee is $100.
- The Articles of Incorporation must include:
- The corporation’s name.
- A statement that the corporation is formed for the purpose of practicing dentistry.
- The name and address of the corporation’s agent for service of process.
- The number of authorized shares (at least one must be issued).
You can file online, by mail, or in person with the California Secretary of State.
Once the Articles of Incorporation are approved, your corporation is legally created, but additional steps are required before you can start practicing.
3. Appoint a Registered Agent
Every Professional Corporation in California must designate a Registered Agent for Service of Process. This is the person or entity responsible for receiving legal documents, lawsuits, and official state notices on behalf of the corporation.
- The Registered Agent must be located in California.
- It can be an individual (including the business owner) or a professional registered agent service.
- The agent’s name and address must be included in the Articles of Incorporation.
Choosing a reliable registered agent ensures that your practice stays in good legal standing.
4. Obtain an Employer Identification Number (EIN) from the IRS
An Employer Identification Number (EIN) is required for:
- Opening a business bank account.
- Hiring employees and paying payroll taxes.
- Filing state and federal taxes.
You can apply for an EIN online for free through the IRS website.
5. Draft Corporate Bylaws and Hold an Initial Board Meeting
Corporate bylaws outline the internal rules and structure of your Professional Corporation. Although bylaws are not filed with the state, they are legally required to maintain corporate compliance.
- Bylaws must define:
- Shareholder rights and responsibilities.
- Voting procedures and decision-making processes.
- How shares can be bought, sold, or transferred.
- Rules for hiring and managing employees.
Once bylaws are established, the first board meeting must be held to:
- Elect corporate officers (President, Treasurer, Secretary).
- Approve bylaws and initial business resolutions.
- Issue shares of stock to the corporation’s owners.
Keeping accurate records of corporate meetings and decisions is important for legal protection and compliance.
6. Register with the Dental Board of California
Since you will be providing professional dental services, your corporation must be registered with the Dental Board of California.
- Submit a Professional Corporation Application to the Dental Board.
- Ensure that all dentists associated with the corporation are licensed.
- Confirm that the corporation follows ownership restrictions—only licensed dentists can be shareholders.
The Dental Board will review and approve your registration before your corporation can legally operate as a dental practice.
7. File a Statement of Information with the California Secretary of State
Within 90 days of forming your corporation, you must file a Statement of Information (Form SI-200) with the California Secretary of State.
- This document updates the state on:
- The corporation’s officers and directors.
- The business’s principal office address.
- The Registered Agent for Service of Process.
The filing fee is $25, and the Statement of Information must be renewed every year to maintain good standing.
8. Obtain Necessary Business Licenses and Permits
Before opening your dental practice, ensure you have the required business licenses and permits.
- City Business License – Required by most California cities for operating a business.
- Seller’s Permit (if applicable) – Needed if selling dental products.
- Health and Safety Permits – Compliance with local health department regulations.
Check with your local city or county office for specific licensing requirements.
9. Open a Business Bank Account and Set Up Accounting
To maintain corporate liability protection, your personal and business finances must remain separate.
- Open a business checking account under the corporation’s name.
- Obtain a business credit card for company expenses.
- Use accounting software or hire a CPA to track income, expenses, and payroll.
A well-managed financial system helps ensure compliance with tax laws and business regulations.
10. Obtain Malpractice and Business Insurance
Protecting your practice from liability risks is essential. Consider:
- Dental Malpractice Insurance – Covers claims related to patient care.
- General Liability Insurance – Protects against business-related lawsuits.
- Workers’ Compensation Insurance – Required if you have employees.
Having the right insurance policies safeguards your practice and assets.
11. Elect Tax Status (S-Corp or C-Corp)
Professional Corporations can choose their tax classification:
- C-Corporation (C-Corp) – Subject to double taxation (corporate and personal income tax).
- S-Corporation (S-Corp) – Allows pass-through taxation, avoiding double taxation.
Consult a CPA or tax attorney to determine the best tax structure for your dental practice.
How We Can Help
At KMSD Law, we specialize in helping dentists establish and structure Professional Corporations in California. Our legal team provides:
- Corporate formation and registration with the California Secretary of State.
- Dental Board of California compliance assistance.
- Bylaw drafting, shareholder agreements, and business contracts.
- Regulatory guidance on tax elections and liability protection.
We offer free case consultations to help you navigate the legal complexities of forming a Professional Corporation for your dental practice.
Contact KMSD Law today to ensure your dental corporation is legally compliant and set up for success.