Introduction
As dental practice owners increasingly explore the option of trading their practices through limited companies, a crucial aspect to consider is acquainting oneself with the relevant regulations set forth by the General Dental Council (GDC). While the process of setting up a limited company may seem straightforward, overlooking vital GDC rules can lead to unforeseen complications. This article aims to shed light on the key considerations involved in incorporating a dental practice as a limited company, emphasizing the importance of compliance, and highlighting potential pitfalls to avoid, all with the expertise of Dental Accountants.
The Importance of Company Name
When establishing a limited company, it is crucial to be mindful of the words used in the company name. Under legislation, the terms "dental" and "dentistry" are considered restricted words. Thus, prior to setting up a limited company incorporating these words, one must obtain a letter of non-objection from the GDC and gain approval from Companies House.
To acquire the letter of non-objection, the GDC requires specific information, including the proposed company name, the nature of the business activity (such as dental supplies, dental practice, or dental laboratory), the full postal address, and the applicant's full name along with their GDC registration number. It is important to note that these requirements also apply when using the words "dental" or "dentistry" in a business or trading name outside the context of a limited company.
Trading as a Registered Dentist
Even when opting not to trade via a limited company, but rather conduct business under a specific name, registered dentists need to adhere to the same regulations. For instance, if a registered dentist wants to trade under the name "Stephen Knowles Dental Care," they must obtain the letter of non-objection from the GDC. Additionally, regardless of forming a limited company, approval from the Secretary of State at Companies House is necessary to use this particular business name.
It's worth noting that domain names, such as stephenknowlesdental.com, can also be regarded as business names falling under the same GDC and Companies House provisions. If the domain name aligns with the approved company or business name, no separate approval is required, as permission has already been granted for the formation of the company or business.
Compliance for Limited Companies' Board of Directors
According to the Dentists Act 1984, a limited company would be in violation if it operates a dental practice with a board of directors in which a majority are not registered dentists or registered dental care professionals. Here's a breakdown of the requirements for different numbers of directors:
Sole Director: In the case of a limited company with a sole director, that director must be registered with the GDC.
Two Directors: If a limited company has two directors, at least one of them must be registered with the GDC.
Three Directors: For a limited company with three directors, a minimum of two directors must be registered with the GDC.
Four Directors: In a limited company with four directors, at least two of them must be registered with the GDC. And so on.
It is crucial to maintain compliance with these regulations to prevent any legal issues and ensure smooth operations within the framework of corporate dentistry.
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Sole Traders and Partnerships
The Dentists Act 1984 explicitly states that individuals who are not registered dentists or dental care professionals cannot engage in the business of dentistry. Consequently, non-dentists are prohibited from purchasing a dental practice as sole traders and employing associate dentists with the aim of circumventing this restriction by claiming they are not treating patients personally.
This prohibition also extends to participating as a partner in a dental practice. Even if the majority of partners within a practice are GDC registered, individuals without GDC registration cannot be part of that partnership.
It is not uncommon to witness these rules being disregarded in family businesses, where non-GDC registered family members are made partners for taxation purposes. However, it is important to note that the Dentists Act strictly prohibits this practice.
To ensure compliance and avoid any legal complications, it is imperative to fully understand and abide by the rules and regulations set forth by the GDC.
Conclusion
In the complex realm of corporate dentistry, it is crucial to navigate the red tape while adhering to the regulations presented by the GDC. This article has provided valuable insight into the requirements for setting up a limited company, obtaining necessary approvals, and maintaining compliance through the composition of a GDC-registered board of directors. Furthermore, we have emphasized that non-GDC registered individuals cannot engage in the business of dentistry as sole traders or as partners within a dental practice.
To navigate the intricacies of corporate dentistry successfully, seeking legal guidance from experienced professionals, such as Dental Accountants, is highly recommended. Remember, compliance with GDC regulations is essential for safeguarding the integrity and professionalism of the dental profession.
Navigating the complexities of corporate dentistry requires a steadfast commitment to compliance with GDC regulations. For expert legal guidance and support, don't hesitate to reach out to PKPI Chartered Accountants. Contact us today to ensure your practice thrives within the bounds of regulatory excellence and financial prudence.
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