TL;DR — Key Takeaways
- Can a non dentist own a dental practice in california? No, and the dental statute is blunter than the medical one. Business and Professions Code section 1625(e) provides that a person practices dentistry who “manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed.” Section 1626 makes practicing without a license unlawful.
- Note the word “lessor” in that list. A structure built on leasing the premises and equipment to the practice is named in the statute, not merely caught by analogy.
- The shareholder list is closed. Section 1800 and Corporations Code section 13401.5(n) permit only licensed physicians and surgeons and six classes of dental auxiliary to hold shares alongside dentists. There is no investor category and no DSO category, and section 13406(a) makes a share issued in violation void – along with any voting trust or proxy giving an outsider the power to vote a shareholder’s shares.
- A new statute arrived on January 1, 2026 and it names dental practices throughout. Health and Safety Code sections 1190 to 1192, added by SB 351, bar a private equity group or hedge fund from interfering with professional judgment or exercising six enumerated powers, and make any contract provision that violates the section “void, unenforceable, and against public policy.”
- SB 351 does not replace the older bar and does not forbid management either. Section 1191(g) says it “does not narrow, abrogate, or otherwise lower the bar on the corporate practice of medicine or dentistry.” Section 1191(h) permits an unlicensed entity to assist and consult on the listed activities “provided that the physician or dentist retains the ultimate responsibility for, or approval of, those decisions and activities.”
The Direct Answer
No. A non-dentist cannot own a California dental practice, and under Business and Professions Code section 1625(e) managing or leasing a place where dental operations are performed is itself the practice of dentistry. Non-dentists participate through a management services arrangement that leaves clinical and specified business control with licensed dentists.
Can a Non Dentist Own a Dental Practice in California? Start With Section 1625
Most discussions of this question start with the corporate practice of medicine and reason by analogy to dentistry. That is backwards, because dentistry has the better statute.
Business and Professions Code section 1625 defines dentistry and then lists who practices it. The list runs through advertising as a dentist, performing or offering operations, indicating that work will be done, and offering examinations. Then subdivision (e):
“Manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed.”
Read that against the medical equivalent. Section 2400 says corporations “shall have no professional rights, privileges, or powers” – a statement of principle that has to be applied. Section 1625(e) does not require application. An unlicensed person who manages or conducts a place where dental operations are performed is, on the statute’s own words, practicing dentistry, and section 1626 makes it “unlawful for any person to engage in the practice of dentistry in the state … unless the person has a valid, unexpired license or special permit from the board.”
Two features of subdivision (e) deserve attention.
“Lessor” is in the list. Many dental service organization california structures are built on the management company owning the premises, the equipment, or both, and leasing them to the practice. That is the one relationship the statute names.
“Or otherwise” closes the list. The enumerated roles – manager, proprietor, conductor, lessor – are examples rather than an exhaustive set.
Section 1626 then supplies seven lettered exemptions: oral surgery by a physician and surgeon, dental school students, visiting clinicians, clinical demonstrations before a dental or medical society with board consent, laboratory work performed on a dentist’s written authorization, wholesale dental supply, and licensing examinations. None of them is a business-ownership exemption.
The only entities that may employ dentists and charge for their services without being deemed to practice dentistry are listed in section 1625.1(a), and there are four: a primary care clinic licensed under Health and Safety Code section 1204(a); a primary care clinic exempt under section 1206(b), (c) or (h); a clinic owned or operated by a public hospital or health system; and a clinic owned and operated by a hospital holding the primary county contract under Welfare and Institutions Code section 17000. Section 1625.1(b) adds that even those entities “shall not interfere with, control, or otherwise direct the professional judgment of a licensee or dental assistant.”
A management company is not on that list.
What Must a Dental Professional Corporation Include?
The practice itself is owned through a dental corporation, and the dental corporation requirements california imposes are specific and short.
| Requirement | Source |
|---|---|
| Shareholders, directors and officers must be licensed persons, subject to the Moscone-Knox exceptions | Bus. & Prof. Code 1805; Corp. Code 13406 |
| Only physicians and surgeons and six classes of dental auxiliary may hold shares alongside dentists | Bus. & Prof. Code 1800; Corp. Code 13401.5(n) |
| Minority licensees capped at 49 percent of shares AND at the number of dentist shareholders | Corp. Code 13401.5 |
| The corporate name must include “dental corporation” or wording denoting corporate existence | Bus. & Prof. Code 1804 |
| Articles must state specifically that it is a professional corporation under the Act | Corp. Code 13404 |
| Professional services only through employees who are licensed persons | Corp. Code 13405(a) |
| The regulating agency is the Dental Board of California | Bus. & Prof. Code 1800 |
| Shares of a disqualified shareholder acquired within 90 days, of a deceased shareholder within six months | Corp. Code 13407 |
Three of those rows repay a second look.
The six auxiliary classes in section 1800 are dental assistants, registered dental assistants, registered dental assistants in extended functions, registered dental hygienists, registered dental hygienists in extended functions, and registered dental hygienists in alternative practice. Corporations Code section 13401.5(n) matches that list exactly, adding licensed physicians and surgeons. Every name on it is a licensee. There is no investor category.
The two ceilings in section 13401.5 apply at once. Minority-profession shareholders may hold no more than 49 percent of shares, and their number may not exceed the number of shareholders licensed by the Dental Board. A single-dentist corporation can admit at most one minority-profession shareholder regardless of percentage.
Section 13406(a) voids two things. A share issued to someone outside the permitted classes is void, and so is any “voting trust, proxy, or any other arrangement vesting another person … with the authority to exercise the voting power” of a shareholder’s shares. Void, not voidable. Any dso structure california practices are offered that leaves voting control of the professional corporation’s shares outside the shareholder group fails at the statute rather than at enforcement.
There is also a succession provision unique to dentistry. Sections 1625.3 and 1625.4 allow a guardian, conservator, authorized representative, executor, administrator, or the trustee of a trust established solely to dispose of the practice, to employ dentists and charge for their services for no more than 12 months from the date of death or incapacity, on conditions that include a board notification and, within 30 days, mailed notice to the last known address of each current patient of record explaining how copies of records may be obtained. Section 1625.5 requires the substance of both sections to be printed on every dental license application and renewal, ending with the instruction that “You and your estate planner should become familiar with these requirements.”
How Does a DSO Structure Work Legally, and Which Functions Can It Control?
Given all of that, the lawful shape is narrow, and as of January 1, 2026 it is narrower and better defined than it used to be.
Health and Safety Code Division 1.7 – sections 1190, 1191 and 1192, added by SB 351 – applies to “a private equity group or hedge fund involved in any manner with a physician or dental practice doing business in this state.” Section 1191(b) forecloses the obvious evasion: the practice’s corporate form – sole proprietorship, partnership, foundation, or corporate entity of any kind – “shall not affect the applicability of this section.”
Section 1191(a)(1) bars interference with professional judgment, including determining what diagnostic tests are appropriate, determining the need for referrals or consultations, being responsible for the ultimate overall care of the patient, and “Determining how many patients a physician or dentist shall see in a given period of time or how many hours a physician or dentist shall work.”
Section 1191(a)(2) bars exercising control over, or being delegated the power to do, six things:
- Owning or determining the content of patient medical records.
- Selecting, hiring or firing clinicians, allied health staff and medical assistants “based, in whole or in part, on clinical competency or proficiency.”
- Setting the parameters for contracting with third-party payers.
- Setting clinical competency parameters for contracting with other clinicians.
- Making decisions regarding the coding and billing of procedures for patient care services.
- Approving the selection of medical equipment and supplies.
Section 1191(c)(2): “Any provision within a contract or other agreement that violates subdivision (a) is void, unenforceable, and against public policy.”
Two provisions cut the other way and belong in any fair reading.
Section 1191(h) preserves the management model. The section “does not prohibit an unlicensed person or entity from assisting, or consulting with,” a physician or dental practice on those decisions and activities, provided the physician or dentist keeps ultimate responsibility for or approval of them. That sentence is the line a compliant management agreement sits on: assistance and consultation yes, delegated power no.
Section 1191(g) preserves everything that came before. The section “does not narrow, abrogate, or otherwise lower the bar” on the corporate practice of medicine or dentistry set by the Business and Professions Code, the Corporations Code, or other applicable law. An arrangement can comply with SB 351 and still violate section 1625(e).
Section 1191(d) is the provision that reaches existing paperwork. A management or asset-sale contract with such a group may not bar a provider from competing with the practice after termination or resignation, or from “disparaging, opining, or commenting” on that practice as to quality of care, utilization of care, ethical or professional challenges in the practice of medicine or dentistry, or revenue-increasing strategies used by the private equity group or hedge fund. Both clause types are standard in older agreements, and section 1191(d)(2) makes them void. Subdivision (d)(3) preserves an otherwise enforceable sale-of-business noncompete, while stating that such a contract “shall not operate as an employee noncompete agreement.”
What Are the Risks in a Non-Compliant Dental Ownership Arrangement?
They stack, and they land on different parties.
Criminal exposure for unlicensed practice. Section 1626 makes it unlawful for any person to engage in the practice of dentistry without a license, and section 1625(e) defines managing or leasing the place as practice.
License exposure for the dentist. Section 1807 binds a dental corporation to the unprofessional conduct rules “to the same extent as a person holding a license,” and gives the board the same powers of suspension, revocation and discipline against the corporation as against an individual.
Void contract provisions. Section 1191(c)(2) and section 1191(d)(2) void the offending provisions of a private equity or hedge fund arrangement. Corporations Code section 13406(a) voids improper share issuances and voting arrangements outright.
Enforcement by the Attorney General. Section 1191(e): the Attorney General “shall be entitled to injunctive relief and other equitable remedies” a court deems appropriate, plus attorney’s fees and costs incurred in remedying a violation.
Corporate registration exposure. Corporations Code section 13408 lists six grounds for suspending or revoking a professional corporation’s certificate of registration, including knowingly employing a disqualified person and violating any statute applicable to a professional corporation. On suspension or revocation “such corporation shall cease forthwith to render professional services in this state.”
And referral compensation, separately. Business and Professions Code section 650 applies to every licensee under Division 2, which includes dentists, and section 650(i) makes violation a public offense carrying a fine up to $50,000.
When to Bring Counsel In
Before the letter of intent, and again before January 2026 paperwork is assumed to be current.
The letter-of-intent moment matters because the dental ownership rules are structural rather than procedural. A transaction that assumes a non-dentist can hold equity is not fixable by a covenant; section 13406(a) voids the issuance. The same is true of a management agreement drafted on a template from another state.
The paperwork moment matters because SB 351 took effect on January 1, 2026 and reaches existing contracts through the provisions it voids. Any dental management services agreement, noncompete or non-disparagement clause written before that date should be read against sections 1191(a), 1191(c) and 1191(d).
There is also a planning reason that is specific to dentistry. Sections 1625.3 and 1625.4 give a dentist’s estate a 12-month window and a 30-day patient-notice duty, and section 1625.5 tells every licensee to discuss it with an estate planner. That is a statute directing dentists to plan, and very few have.
Related reading includes what the Moscone-Knox Act requires, California’s corporate practice of medicine doctrine, the MSO and PC structure explained, what a management services agreement is, what is still legal after SB 351, fee-splitting and kickbacks in California healthcare, buying or taking over a healthcare practice in California, and how to structure a compliant friendly-PC and MSO.
Work with Bay Legal
Bay Legal, PC advises California dental practices, management companies and investors on dental corporation formation, management services agreements, SB 351 compliance, and practice transitions. Call (650) 668-8000 in Northern California or (213) 668-8000 in Southern California, or schedule a consultation at https://baylegal.com/contact-us/.
Frequently Asked Questions
Can a non-dentist own a dental practice in California?
No. Business and Professions Code section 1625(e) provides that a person practices dentistry who “manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed,” and section 1626 makes practicing without a license unlawful. Section 1800 and Corporations Code section 13401.5(n) limit shareholders to dentists, licensed physicians and surgeons, and six classes of dental auxiliary. Only the four clinic categories in section 1625.1(a) may employ dentists and charge for their services.
How does a DSO structure work legally?
Through a management services arrangement in which the licensed dentists retain clinical and specified business control. Since January 1, 2026, Health and Safety Code section 1191 has drawn that line for private equity groups and hedge funds: no interference with professional judgment, and no control over or delegation of six listed powers including records, competency-based hiring, payer contracting parameters, and coding and billing decisions. Section 1191(h) permits assistance and consultation provided the dentist retains ultimate responsibility or approval.
What must a dental professional corporation include?
Licensed shareholders, directors and officers subject to the Moscone-Knox exceptions; a shareholder group limited to dentists, physicians and surgeons and six dental auxiliary classes; minority licensees capped both at 49 percent of shares and at the number of dentist shareholders; a name including “dental corporation” or wording denoting corporate existence under section 1804; articles stating specifically that it is a professional corporation; and services rendered only through licensed employees.
Which management functions can a DSO control?
Genuine administrative and business support, so long as the dentist retains ultimate responsibility or approval under Health and Safety Code section 1191(h). What it may not control or be delegated, under section 1191(a)(2), is ownership or content of patient records, hiring and firing based in whole or part on clinical competency, the parameters for third-party payer contracting, clinical competency parameters for contracting with other clinicians, coding and billing decisions, and approval of equipment and supply selection.
What are the risks in a non-compliant dental ownership arrangement?
Criminal exposure under section 1626 for unlicensed practice; license exposure for the dentist and for the corporation under section 1807; void contract provisions under Health and Safety Code sections 1191(c)(2) and 1191(d)(2) and Corporations Code section 13406(a); Attorney General enforcement with injunctive relief and attorney’s fees under section 1191(e); suspension or revocation of the corporation’s certificate under section 13408; and separate referral-compensation exposure under Business and Professions Code section 650.
