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California Dental Law
Frequently Asked Questions

Disclaimer: The contents of this website are not intended to be, nor shall they be considered, legal advice or legal opinions. Please see your attorney for thorough and reliable treatment of the subject.

Q: What should I name my California professional corporation?

A: Due to California fictitious business name limitations, you must use the last name(s) of one or more of the owners, plus some corporate designation, as part of the corporate name. I strongly recommend that a one or two person corporation use the full professionally licensed name(s) followed by "Inc." since it will avoid confusion with the dental board and dental insurance carriers. If you want to use a fictitious business name for the practice, you can request a permit to do so from the California Dental Board after the corporation has been formed.

California Business & Professions Code §1701.
Any person is for the first offense guilty of a misdemeanor and shall be punishable by a fine of not less than two hundred dollars ($200) or more than three thousand dollars ($3,000), or by imprisonment in the county jail for not to exceed six months, or both, and for the second or a subsequent offense is guilty of a felony and upon conviction thereof shall be punished by a fine of not less than two thousand dollars ($2,000) nor more than six thousand dollars ($6,000), or by imprisonment in the state prison, or by both such fine and imprisonment, who:

(i) Under any false, assumed or fictitious name, either as an individual, firm, corporation or otherwise, or any name other than the name under which he is licensed, practices, advertises or in any other manner indicates that he is practicing or will practice dentistry, except such name as is specified in a valid permit issued pursuant to Section 1701.5.

California Business & Professions Code §1804.
Notwithstanding subdivision (i) of Section 1680 and subdivision (i) of Section 1701, the name of a dental corporation and any name or names under which it may be rendering professional services shall contain and be restricted to the name or the last name of one or more of the present, prospective, or former shareholders and shall include the words "dental corporation" or wording or abbreviations denoting corporate existence, unless otherwise authorized by a valid permit issued pursuant to Section 1701.5.

Q: May an incorporated dental practice use a fictitious business name?

A: Incorporated practices, or unincorporated practices of three or more dentists, may apply to the California Dental Board for a permit to use and operate under a fictitious business name. However, that fictitious business name (and the corporation's name, if incorporated) must contain the last name of at least one of the dentists in the corporation AND the phrase "dental group," "dental practice" or "dental office." Unfortunately, these restrictions do not allow for an easily marketable name. Get the application by clicking HERE or by calling 916.263.2300. See the text of the applicable law below:

California Business & Professions Code §1701.
Any person is for the first offense guilty of a misdemeanor and shall be punishable by a fine of not less than two hundred dollars ($200) or more than three thousand dollars ($3,000), or by imprisonment in the county jail for not to exceed six months, or both, and for the second or a subsequent offense is guilty of a felony and upon conviction thereof shall be punished by a fine of not less than two thousand dollars ($2,000) nor more than six thousand dollars ($6,000), or by imprisonment in the state prison, or by both such fine and imprisonment, who:

(i) Under any false, assumed or fictitious name, either as an individual, firm, corporation or otherwise, or any name other than the name under which he is licensed, practices, advertises or in any other manner indicates that he is practicing or will practice dentistry, except such name as is specified in a valid permit issued pursuant to Section 1701.5.

California Business & Professions Code §1701.5.
Any association or partnership or corporation or group of three or more dentists, engaging in practice under any name that would otherwise be in violation of Section 1701 may practice under this name if, and only if, the association, partnership, corporation or group holds an outstanding, unexpired, unsuspended, and unrevoked permit issued by the board under this section. The board shall issue written permits authorizing the holder to use a name specified in the permit in connection with the holder's practice if, and only if, the board finds to its satisfaction that:

(i) The name that the applicant or applicants propose to operate contains at least one of the following designations: "dental group," "dental practice," or "dental office" and contains the family name of one or more of the past, present, or prospective associates, partners, shareholders, or members of the group, and is in conformity with Section 651 and subdivisions (i) and (l) of Section 1680.

Q: I see many dentists using fictitious business names that do not meet the legal requirements you describe; how can they do this?

A: A general fictitious business name application can be filed by ANY business in the county where the business operates, without California Dental Board review. This is probably what most of these dentists have done. However, it is certain that they have not attempted to register that name with the California Dental Board. I have spoken to the California Dental Board directly on this issue, and was told that while the Board does not go out looking for fictitious name violations (due to staffing shortfalls), it will take action against the dentist if a complaint is made and an illegal name is discovered during that investigation. I have also heard 2nd hand that the Board may consider these restrictions to be unenforceable.

Q: How many dental offices / practice locations is a dentist allowed?

A: For quite some time a dentist was allowed to hold ownership or management rights in only two practice locations. However, changes to the law now permit a dentist to own and practice at any number of offices, with certain limitations.

California Business & Professions Code §1658.
When any licentiate hereunder desires to have more than one place of practice, he shall, prior to the opening of any additional office, make application therefor to the board, pay the fee required by this chapter, and receive permission in writing from the board to have such additional place of practice.

California Business & Professions Code §1658.1.
Nothing in this chapter shall be construed to prohibit a licensed dentist from maintaining more than one dental office in this state if all of the following conditions are met:

(i) In addition to any existing legal responsibility or liability, a dentist maintaining more than one office shall assume legal responsibility and liability for the dental services rendered in each of the offices maintained by the dentist.
(ii) A dentist maintaining more than one office shall ensure that each office is in compliance with the supervision requirements of this chapter.
(iii) A dentist maintaining more than one office shall post, in an area which is likely to be seen by all patients who use the facility, a sign with the dentist's name, mailing address, telephone number, and dental license number.

Q: I have been approached by an investor who wants to form a Management Service Organization (MSO) to own a dental office and pay me a per-diem rate for my services. Is this legal in California? What about paying for practice referrals?

A: No. California licensed medical professionals (doctor, dentist, chiropractor, acupunturist, psychologist, physical therapist, etc.) are not allowed to share profits with anyone not holding the same professional license. However, there ARE some exceptions to this rule that I would discourage you from using; see California Corporations Code §13401.5.

A medical professional MAY, however, hire an individual or MSO to provide professional support services. These can include such services as office space and equipment rentals, accounts payable and billing services, scheduling, traditional marketing (but see below), and staffing of non-licensed personnel, SO LONG AS the compensation arrangement is not calculated, directly or indirectly, to the profitability of the professional practice.

For example, an MSO that charges a dentist for such services with (a) a flat monthly rate, or (b) a set percentage of expenses regardless of income, is perfectly legitimate. The California Business & Professions Code also states that a licensed professional may pay for such services if payment "… is based on a percentage of gross revenue or similar type of contractual arrangement shall not be unlawful if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer." It is my opinion that any payment arrangement based on gross revenues almost certainly does not meet this standard, particularly when the practice is profitable.

While I am aware that arguments could be made in individual circumstances that the "gross receipts" approach is legal in specific circumstances, and although other attorneys may disagree with my position, I am not willing to do any legal work on a "gross receipts" MSO since I believe it could put your professional license at risk.

In no event may a California licensed medical professional pay anyone for patient referrals. The intent of this rule is to prevent "cappers" (pardon the expression) from drumming up business and being paid a fee for bringing in a patient. It is my opinion that traditional marketing services (print, radio or TV advertisements, mass mailings, coupons) are not prohibited by this rule.

California Business & Professions Code §650
...the offer, delivery, receipt, or acceptance by any person licensed under this division ... of any rebate, refund, commission, preference, patronage dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring patients, clients, or customers to any person, irrespective of any membership, proprietary interest or co-ownership in or with any person to whom these patients, clients, or customers are referred is unlawful.

The payment or receipt of consideration for services other than the referral of patients which is based on a percentage of gross revenue or similar type of contractual arrangement shall not be unlawful if the consideration is commensurate with the value of the services furnished or with the fair rental value of any premises or equipment leased or provided by the recipient to the payer.

A violation of this section is a public offense and is punishable upon a first conviction by imprisonment in the county jail for not more than one year, or by imprisonment in the state prison, or by a fine not exceeding fifty thousand dollars ($50,000), or by both that imprisonment and fine. A second or subsequent conviction is punishable by imprisonment in the state prison or by imprisonment in the state prison and a fine of fifty thousand dollars ($50,000).