News and Events

Structuring Your Dental Practice

View profile for JCP Solicitors
  • Posted
  • Author

There is a fixed number of ways that dental businesses can operate - as a sole trader, partnership, expense sharers or as companies. Here is an overview of some of these options; sole traders, partnership and expense sharers. We will return to limited company’s and limited liability partnerships in the next edition of the Healthcare Newsletter. 

Sole trader

By setting up as a sole trader the dentist operates as an individual and is taxed as an individual and is liable fully for the practice, debts and liabilities. This is a common and relatively simple structure for sole practitioners.

The benefits of being a sole practitioner are:

Decision making is quick and simple since you have only yourself, no other business partners, directors or shareholders to worry about, so the business can be light on its feet should you decide to change some or all of its work, i.e. NHS to private.

The downside of being a sole practitioner is that you trade on your own and generally have no help from other dentists in the event of illness of holiday. Sole practitioners do not have any protection from the commercial risk and in the event that the business fails then bankruptcy maybe a real issue. 


A partnership operates where one or more dental professionals practice together with a view to making profit. Within these business partnerships it is quite common for the two practitioners to be husband and wife, brothers, or father and son, who trade together and, after payment of their costs, divide the profit in whatever share they agree. Generally,  there aren’t actually many true 50/50 partnerships in dentistry with each partner working the same hours and earning the same money, with an equitable split of the profits at the year end.

Since most dentists in practice tend to work different hours or todo different types of work, a far more common arrangement for dentists is expense sharing. 

Expense Sharing

This is a common business structure used by dentists who generally share a surgery and costs but keep their business and earnings separate from each other. The dentists share and own common premises, equipment, facilities, they jointly employ staff and they may share the management functions and contribute jointly towards costs.

Each partner will deal with tax as an individual on the basis of their own earnings but dentists who practice in this way have unlimited liability for commercial risk in exactly the way as sole traders do.

Whilst many enjoy the flexibility of this arrangement it can be complicated if one dentist decides to move on or retire - and it is very unlikely that they will be able to take their practice with them. Every expense share arrangement should have an expense sharing deed. This regulates the activities of the practice, covering, amongst other things, the ability of the remaining partner to purchase the other partner’s share in the practice at valuation. Without such a deed then you can imagine the consternation that can be caused if there were to be a split!

I hope you find this brief explanation useful and we will be discussing the more thorny issues around Limited Company’s and LLB Partnerships in the next issue.