How to Form a Dental and Orthodontic Professional Corporation
Forming a dental or orthodontic professional corporation may actually provide many legal advantages and benefits over establishing the business as a dental partnership or a sole proprietorship. However, forming a dental and orthodontic professional corporation can be a legally complex and challenging process and requires strict compliance with both federal and state laws. Some of the main considerations regarding establishing a professional corporation for a dental and orthodontic practice are highlighted below.
Professional dental and orthodontic corporations are governed by the Moscone-Knox Professional Corporation Act in the state of California. Any dental or orthodontic practice that wants to establish a professional corporation must abide by these laws in California.
Forming a Professional Corporation
In order to actually form a professional dental corporation in the state of California, the California Secretary of State has specific naming restrictions, and the names of professional corporations must have their approval. Following the acceptance of the name, a professional corporation must then create the Articles of Incorporation, which should contain mandatory provisions required by both federal and state law. These Articles of Incorporation are then filed with the Secretary of State. After these first initial steps, the following must occur or be created:
- Corporate Bylaws (identifying the corporate structure and rules of the professional corporation)
- Obtaining an Employer Identification Number (EIN), from the Internal Revenue Service (IRS)
- Open a bank account in the name of the professional corporation
- Filing for an S-Corp election (if appropriate)
- Filing a Statement of Information with the IRS
- Apply for an appropriate business license in your state or city
- Apply for a fictitious business name (if appropriate)
Taxation of Professional Corporation
Professional corporations in the state of California may be taxed as either S-Corps or C-Corps. It is important to note that all professional dental and orthodontic organizations are listed by default as a C-Corp unless they choose to be an S-Corp. The taxation of these different types of entities are vastly different, and you should visit with an experienced professional before you make your decision regarding which type of Corporation you choose for our dental or orthodontic practice.
Maintaining a Professional Dental Corporation
Once you have taken the time to correctly form your dental or orthodontic professional corporation, you will still need to do several things on a consistent basis in order to ensure compliance of your corporation. These include shareholders’ meetings at least annually, the board of directors’ meetings as often as necessary, always taking official minutes of these meetings and preserving them, and filing a statement of information with the state of California annually.
Contact an Experienced Attorney
The formation of a professional dental and orthodontic corporation in the state of California is a complex and oftentimes complicated process. Visit with an experienced attorney at the Law Office of Kris Mukherji at (858) 442-5747 to help you determine your next steps and help you ensure you obtain the best advantages and benefits when you establish your dental and orthodontic professional corporation.