Corporate practice of dentistry: what four states' own statutes say about who may own a practice

What it says#

There is no federal corporate practice of dentistry rule. There are fifty state dental practice acts, and four of them were read for this entry: Florida, California, North Carolina and Washington. They agree on the principle and differ in the words, which is the whole point.

Florida is the bluntest. Section 466.0285 of the Florida Statutes, headed "Proprietorship by nondentists," says that "No person other than a dentist licensed pursuant to this chapter, nor any entity other than a professional corporation or limited liability company composed of dentists, may: (a) Employ a dentist or dental hygienist in the operation of a dental office. (b) Control the use of any dental equipment or material while such equipment or material is being used for the provision of dental services. (c) Direct, control, or interfere with a dentist's clinical judgment." Subsection (2) states the purpose, "to prevent a nondentist from influencing or otherwise interfering with the exercise of a dentist's independent professional judgment," and then bars an unlicensed person or entity from exercising control over four more things: the selection of a course of treatment and the materials used; "the patient records of a dentist"; "policies and decisions relating to pricing, credit, refunds, warranties, and advertising"; and "decisions relating to office personnel and hours of practice." Violation is a third-degree felony, and "any contract or arrangement entered into or undertaken in violation of this section shall be void as contrary to public policy." The section applies to contracts entered into or renewed on or after October 1, 1997.

California gets there through the definition of practice itself. Business and Professions Code section 1625 lists who "practices dentistry within the meaning of this chapter," and the last item is a person who "manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed." Section 1626 then makes it "unlawful for any person to engage in the practice of dentistry in the state, either privately or as an employee of a governmental agency or political subdivision, unless the person has a valid, unexpired license or special permit from the board." Put together: managing the place is practicing, and practicing without a license is unlawful.

North Carolina writes the same idea into its list of acts that constitute dentistry. General Statute 90-29(b)(11) reaches anyone who "owns, manages, supervises, controls or conducts, either himself, by and through another person or other persons, or by use of any electronic or other digital means, any enterprise wherein any one or more of the acts or practices set forth in subdivisions (1) through (10) above are done." Separately, the state's Professional Corporation Act, G.S. 55B-4, requires that "all of the shares of stock of the corporation shall be owned and held by a licensee, or licensees," with the licensing board certifying compliance.

Washington is the state that wrote both halves down. RCW 18.32.675 opens with the prohibition, "No corporation shall practice dentistry," and then, in subsection (2), lists what an unlicensed person or entity may do anyway: own or lease "any assets used by a dental practice, including real property, furnishings, equipment, instruments, materials, supplies, and inventory, excluding dental records of patients"; employ or contract for personnel other than licensed clinical staff; provide "business support and management services to a dental practice, including as a sole provider of such services"; and receive fees for those services "calculated as agreed to by the dental practice owner or owners." That is the management-services company, described in a statute.

The limit sits in the next section. RCW 18.32.677, added in 2017, says an unlicensed person or a non-professional entity practices dentistry unlawfully if it "interferes with a licensed dentist's independent clinical judgment," and then lists ten ways: limiting the time a dentist spends with a patient or setting patient or procedure quotas; limiting the decision on a course or alternative course of treatment or how it is carried out; limiting how the dentist uses equipment or materials; limiting the choice of laboratory or supplies; limiting the professional training the dentist deems necessary; limiting referrals; interfering with the dentist's right to access patient records at any time; interfering with a decision to refund a patient; limiting advertising in a way that would violate the chapter; and limiting communications with the dentist's patients. The legislature's own finding, enacted with it, says dentists "should have the option to contract for administrative support services" and to lease property, and that "these contract decisions must not interfere with the independent clinical judgment of the dentist entering the contract."

For the model itself, the ADA's own words are worth having. Its explainer defines a dental support organization as an entity that offers "administrative, marketing and nonclinical support to dental practices," where "practice owners contract with DSOs to manage the business side of their practice," and notes that DSOs "are either privately held or partner with private equity firms." On the contract, the ADA's practice page says the Association "urges a dentist who is in any such situation to review a business services agreement with a healthcare attorney experienced with these types of agreements."

Who it applies to#

Owners considering an affiliation, and associates being asked to sign as the licensed owner of record in someone else's group. The statutes above are written to protect the second person as much as the first: Washington's interference list is a list of things that would be done to a dentist, not by one.

It applies to the service agreement itself, not only to the sale of stock. Nothing in these sections turns on whether money changed hands for equity. Florida reaches "any lease agreement, rental agreement, or other arrangement"; Washington reaches any "person or entity" that interferes.

It does not apply the same way anywhere else. Four states were read here. Others define practice differently, allow different ownership, register or license DSOs, or have said nothing at all. A conclusion drawn from Florida's felony provision does not travel to a state that has no such provision, and none of this is legal advice.

What changed#

The doctrine is old. California's managing-and-conducting language dates to the 1937 recodification of its dental law; North Carolina's professional corporation rule dates to 1969; Florida's proprietorship section reached its current form in 1997. What changed is the contract that grew up beside it. Rather than owning the practice, a service company owns the building, the chairs, the computers and the non-clinical staff, and sells all of it back to a dentist-owned entity for a fee. Washington's 2017 and 2018 amendments are notable because a legislature looked at that arrangement and blessed it by name, while drawing an explicit ten-item line the service company may not cross.

The second change is who is on the other side of the table. The ADA's own description now says DSOs "partner with private equity firms that furnish the necessary capital." The pressure points in Washington's list, chair time, quotas, materials, labs, referrals, are exactly the levers a financial owner would reach for.

Where the source is#

Each source here is the law or the association speaking for itself. The Washington sections are on the state legislature's site: RCW 18.32.675 (practice or solicitation by corporations prohibited, with the management services carve-out) and RCW 18.32.677 (interference with a licensee's independent clinical judgment, with the 2017 finding and intent in the notes). Florida Statutes 466.0285 is on the Florida Legislature's site. California Business and Professions Code 1625 and 1626 are on leginfo.legislature.ca.gov. North Carolina General Statutes 90-29 and 55B-4 are on ncleg.gov. The DSO definition and the contract recommendation are from the ADA's own pages, and the ADA notes on its page that its materials "are in no way a substitute for actual professional advice." A law firm explainer appeared in this site's research list for this topic and was deliberately not used; a firm's summary is not the rule. Ownership law is state-specific, it is changing, and nothing on this page is legal advice.