Calling all Dentists

We often revisit the topic of practice incorporation with our dental clients. Practices opt to transition to trading as a company, rather than a sole trader or partnership, often seeking our assistance in navigating the legal steps involved. This decision is frequently prompted by advice from their accountants, aimed at tax minimization, a goal that is attainable under the right circumstances.

But what exactly is a Dental Body Corporate? This term, as outlined in the Dentists Act and associated regulations, refers to a company that owns and operates a dental practice. While it functions as a limited company, it is subject to additional regulations, particularly regarding the structure of its Board of Directors, which dentists considering incorporation should be mindful of.

The process of incorporation sometimes involves simply forming a company, opening a bank account, and commencing trading immediately. However, it’s crucial to recognize that incorporation entails transferring your business from yourself (and/or partners) to a company, a step that should be documented through a Business Transfer Agreement (BTA). This ensures evidence of the transfer in case of future enquiries, such as from HMRC.

Practice premises: considerations arise whether you own or lease them. If owned, you can transfer them to the company; if leased, you’ll need your landlord’s consent to assign the lease to the company.

Staff implications: must also be addressed, as their employment is technically transferred along with the business. Regulations mandate formal notification to staff about the transfer’s implications, similar to when a practice is bought or sold.

Practical steps: include setting up new bank accounts, securing new insurances, informing suppliers of the corporate structure change, and more. Attention must be given to NHS list numbers to ensure smooth redirection of NHS income to the company bank account.

Expert advice from legal and accounting dental specialists on NHS list numbers is crucial, as errors in this area can have significant repercussions. Seek professional guidance to navigate this complex process effectively.