Practice Directorships - confusion over 50% rule

An increasing number of dentists are opting for incorporation or forming a limited company to run their practices.

A partnership business is owned and managed by the partners themselves, whereas in a company structure, there is a legal distinction between the shareholders as owners and the directors who are responsible for running the company. It is important that you have a properly drafted legal agreement in place if you are changing the business arrangements of the practice, even if the shareholders and directors are likely to be the same people.

The GDC is taking legal advice in order to try and end the confusion over who is eligible to be a director. It is believed that the intention was that the majority of directors should be required to be Registered Dental Care Professionals.

Section 43 of the Dentists Act provides that an offence is committed if the majority of directors are not ‘Registered Dental Care Professionals’ i.e. therapists, nurses and other GDC registered dental healthcare professionals. In theory this means a two person Board could be a dental practitioner and their non-GDC registered spouse. If and when the law is clarified, the composition of your Board may have to change accordingly.

While the company structure is useful for practices, it is essential to get independent advice from specialist dental lawyers to make sure that the way the company is structured meets its legal obligations and your practice needs.

For more information call Ray Goodman on 0151 707 0090 or email rng@goodmanlegal.co.uk www.goodmanlegal.co.uk