Worth consideration

Ever since the General Dental Council amended the regulations to allow dentists to trade through limited companies from July 2006, the issue has been clouded with speculation and misinformation that has deterred many practitioners from investigating the possibilities.

Whilst it's true that incorporation will not suit every practice, the decision should at least be made in full knowledge of the facts. Individual practice circumstances vary widely and objective, professional advice should always be sought before a change of status is contemplated. This article answers the basic questions about incorporation that all dentists operating as sole traders or within a partnership should be asking.

What is incorporation?

Incorporation is the process that transfers the ownership of an existing sole trader dental practice or partnership to a limited company (usually newly formed). Incorporation is now an option for practice principals and partners, as well as for self-employed associates.

A limited company is a separate legal entity, with its own legal identity, which is owned by one or more shareholders and managed by one or more directors. In a sole trader or a partnership, ownership and management vests in the sole trader or partners.