How to Form a Dental Service Organization: 3 Steps to Take for a Successful Practice

After achieving success with their dental practices, many dentists consider forming Dental Service Organizations.

Creating separate dental DSO entities allow professionals to expand their dental services across state lines. Various dental practices can also merge under a DSO “umbrella,” allowing nationwide companies to scale their expansions better.

Up-and-coming dental practices may want to consider joining a DSO in the future. DSOs have multifaceted management teams that offer critical support services for dental practices. This helps practices maintain consistent clientele and growth.

Forming a DSO dental takes more than just paperwork. Here are 3 necessary steps you need to consider before creating a Dental Service Organization.

Understanding Compliance Regulations

First, you need to understand the right business model for your DSO. Learn the pros and cons of corporate and private models before moving forward. DSOs follow a corporate model, which is vital to consider.

Next, you’ll need to understand how your state regulates corporate dental practices. For example, your state may have strict rules about how DOSs and their management service agreements are structured. Furthermore, a state may require that dental practices must be owned by dentists exclusively, while DSOs should be owned by investors.

Understand Dental DSO Sales and Acquisitions

Acquisitions of other dental practices are common when forming a large DSO. Your next step is to learn the entire transaction and acquisition process behind dental service organizations.

The transaction method you use will also depend on your state’s DSO compliance regulations. The person buying the practice or DSO will draft a letter of intent, or an LOI when they’re ready to make a deal.

DSO acquisitions is not a process you want to take on without legal help. It’s best to consult or hire an attorney from the start, preferably, one who specializes in corporate dental tax law.

Your legal team should be involved from the very start of your DSO formation. Knowledge of contract law is essential since DSOs enter into multiple service contract agreements. If your contracts aren’t airtight, you open up your DSO to potential lawsuits and compliance violations.

Find a Lawyer

As DSOs continue to grow, so does the need for specialized legal solutions for the dental industry. Now, you can find law firms that focus on helping dentists and investors form dental service organizations. DSOs are also becoming popular with retired dentists!

To find an excellent lawyer, ask for referrals from fellow dentists or non-dentist investors. Are you retiring? Talk to fellow retirees who are getting into the DSO investing game.

Take your time to find the right legal solution. Most law firms offer free quotes and consultations. You may want to consider talking to a standard business lawyer first, especially if you’re new to DSOs and investing.

Do You See a DSO Dental in Your Future?

Forming a DSO dental is a major decision that could yield significant rewards. Remember these tips as you consider your options and future in dentistry.

Do you aspire to reach higher in your profession? These tips are only the beginning. Check out the rest of our blog to discover more valuable hacks for building your future.

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