Who Can Own a Dental Business?
Here at The Pluto Partnership we are always advertising in both the Buyers' and Sellers' markets to provide a service in the transfer of ownership of Healthcare practices. We often get asked can a non-dentist own a dental practice? The answer is Yes, but there are nuances to the answer.
Firstly we seek to establish what is meant by ‘own a dental practice’.
Ownership of the physical building and or the equipment inside is pretty straight forward. Most dental practices in the UK are owned by landlords entirely separated from the dental profession and the occupying dental business owner pays a rent to the landlord. In many case the larger items of equipment (the chair, compressors, autoclaves etc) may be leased from equipment supply companies and there would be nothing wrong in a commercial landlord renting out a fully fitted dental practice and building to a dental business owner.
Really the issue here though is about the ownership of the revenues and profits from the delivery of dental services in whatever location. This is where the nuances come into play and they vary slightly depending on how the ownership of the practice has been structured.
A dental business owner can operate under a number of conventional guises, including: Sole Trader, Partnership, Limited Company however, Under the Dentists Act 1984, save for in very limited circumstances (i.e. if such person was already carrying on the business of dentistry on 21st July 1955), only dentists or specifically prescribed dental care professionals (DCPs) can carry on the business of dentistry. The definition of the business of dentistry includes receiving payment for services rendered in the course of the practice of dentistry (either personally or via a partner or employee). Therefore non-dentists cannot set up or buy dental practices as an individual or partnership but they are permitted to be shareholders of a limited company which owns the practice. This is under the caveat that the majority of directors of that limited company cannot be non-dentists or DCPs i.e. the number of dentist / DCP directors must be equal to or greater than the number of non-dentist / DCP directors. This in fact is becoming more prevalent and we expect to see it increase now with many non-dentists investing as shareholders of limited companies owning multi-disciplinary healthcare services including but not limited to Dental services in the same location.
In addition to these overriding restrictions, NHS regulations are specifically designed to keep NHS dental service under the strong influence of qualified clinicians, not necessarily Dentists. NHS contracts can only be awarded to;
- A member of the NHS family (this is someone who already is employed or remunerated by an existing NHS entity or contract) if they are a sole trader or partnership. In the case of the Partnership a non-clinician or NHS family member does not necessarily need to be a named on the NHS contract but can be so if they wish. In practice when awarding Dental NHS contracts the Area Teams will favour Dentist clinicians over other clinical specialists;
- A Limited Company can be awarded an NHS contract providing that a majority of the Board of Directors (note Directors, not Shareholders) are not non-qualifying Clinicians (as mentioned above, this means that the number of dentist / DCP directors must be equal to or greater than the number of non-dentist / DCP directors);
- All of the other ownership structures previously mentioned can be awarded NHS contracts again providing that the contractors are dentists or DCPs
There are a couple of other points to bear in mind;
Dentistry, both Private and NHS is regulated by the Care Quality Commission and as part of their checks they will need to see the real influence of qualified clinicians in the day to day operation of the business;
Dentistry in all its forms is also regulated by the General Dental Council who should ensure that service delivery is by suitably qualified and registered clinicians, in particular they are looking to oversee compliance with the Dentists Act 1984;
- Compliance with registration of clinicians and nurses;
- Compliance with the appropriate numbers of dentists / DCPs on Boards of Directors;
- They have a regulatory control over the descriptive term “Dentist” and “Dentistry” and any business wishing to use that term in its name or advertising can only do so if the GDC is satisfied as to the suitable clinical qualifications of the service performers.
The above is the experienced understanding of the situation as at July 2020. Anybody wishing to own a dentist business should consult their own specialist solicitors, recommendations for which we can supply.
Pluto Partners’ expertise can help maximise the value of your dental practice, Director and Partner Max Bazzucchini is waiting to hear from you.