In the world of business formation, the term Dental Hygienists in Alternative Practice PLLC, or Dental Hygienists in Alternative Practice Professional Limited Liability Company, refers to a special legal business entity that is designed for registered dental hygienists in alternative practice for rendering professional services. However, navigating the specifics of using a Dental Hygienists in Alternative Practice PLLC can be a challenge, particularly as business structure regulations vary from state to state. This article discusses the permissibility of utilizing Dental Hygienists in Alternative Practice PLLCs in California, and the alternatives for dental hygienists in alternative practice.

Spoiler Alert: Dental Hygienists in Alternative Practice Cannot Practice Using Any LLC in California

If you are already practicing as a dental hygienist in alternative practice in California as a California LLC or an LLC or PLLC from a state other than California, you should also read this article which includes information about how to get into compliance with California law for your practice.

The California Revised Uniform Limited Liability Company Act of the California Corporations Code Prohibits the Use of LLCs for the Provision of Professional Dental Hygienist in Alternative Practice Services by Registered Dental Hygienists in Alternative Practice in California

Use of a California LLC to Render Professional Dental Hygienist in Alternative Practice Services in California

Neither a foreign nor a California limited liability company (LLC) may be used to render professional dental hygienist in alternative practice services in California. This comes as a surprise to many registered dental hygienists in alternative practice, as Dental Hygienists in Alternative Practice Professional Limited Liability Companies are commonly used to render professional dental hygienist in alternative practice services in other states. However, California Corporations Code Section 17701.04(e) answers the question clearly regarding the use of a foreign or California LLC as a business entity for registered dental hygienists in alternative practice in California:

“Nothing in this title shall be construed to permit a domestic or foreign limited liability company to render professional services, as defined in subdivision (a) of Section 13401 and in Section 13401.3, in this state.”

Thus, registered dental hygienists in alternative practice may not use or form limited liability companies for the provision of professional dental hygienist in alternative practice services in California.

Use of a California PLLC to Render Professional Dental Hygienists in Alternative Practice Services in California

Based upon California Corporations Code Section 17701.04(e), which prohibits the use of a foreign or California LLC to render professional dental hygienist in alternative practice services, because nothing in the California Corporations Code differentiates the idea of a California Dental Hygienists in Alternative Practice PLLC from the California LLC, there is nothing in California law regarding LLC formation for the provision of professional dental hygienist in alternative practice services, and nothing establishes a California Dental Hygienists in Alternative Practice PLLC as a business entity that may be formed under California law.

In short, there is no California Dental Hygienists in Alternative Practice PLLC as the law currently stands at the time of this writing in 2024, and thus registered dental hygienists in alternative practice are unable to form a California Dental Hygienists in Alternative Practice PLLC for their professional dental hygienist in alternative practice services. This is a significant departure from the norm in many other states, where Dental Hygienists in Alternative Practice PLLCs are a commonly used business entities for registered dental hygienists in alternative practice.

Use of a Foreign Dental Hygienists in Alternative Practice PLLC to Render Professional Dental Hygienists in Alternative Practice Services in California

Based upon California Corporations Code Section 17701.04(e), which prohibits the use of a foreign or California LLC by registered dental hygienists in alternative practice to render professional dental hygienist in alternative practice services, and because the California Corporations Code does not differentiate between a between a foreign LLC or foreign PLLC for purposes of California Corporations Code Section 17701.04(e), neither a foreign LLC nor a foreign PLLC may be used by registered dental hygienists in alternative practice to render professional dental hygienists in alternative practice services in California.

Professional practices that are structured as Dental Hygienists in Alternative Practice PLLCs in other states need to exercise extreme caution when offering professional dental hygienist in alternative practice services in California. The prohibition set forth in California Corporations Code Section 17701.04(e) means that out-of-state dental hygienist in alternative practice practices operating as Dental Hygienists in Alternative Practice PLLCs in their home state may encounter legal restrictions if they wish to offer their professional dental hygienist in alternative practice services in California. Therefore, the registered dental hygienists in alternative practice practicing under these Dental Hygienists in Alternative Practice PLLCs in their home states must not use their Dental Hygienists in Alternative Practice PLLCs when rendering professional dental hygienist in alternative practice services in California and must do so either as a California Sole Proprietorship or California General Partnership by default, or by establishing a California Professional Dental Hygienists in Alternative Practice Corporation, as will be discussed below.

What Business Structure Options Do Dental Hygienists in Alternative Practice Have in California?

As California does not allow the use of California LLCs, foreign LLCs, or foreign Dental Hygienists in Alternative Practice PLLCs (and there is no such thing as a California PLLC!) for the provision of professional dental hygienist in alternative practice services in the State of California, California registered dental hygienists in alternative practice seeking to practice as dental hygienists in alternative practice in California must explore choose one of the permissible business structures, as discussed below.

Selecting the best permissible business structure option will depend on the specific professional dental hygienist in alternative practice services to be offered and the regulations governing those dental hygienists in alternative practice services. In the following subsections, we will introduce the various business entities that are permitted to render professional dental hygienist in alternative practice services in California, including Limited Liability Partnerships, Sole Proprietorships, General Partnerships, and Professional Dental Hygienists in Alternative Practice Corporations, each of which comes with its own set of advantages and limitations.

A California Registered Dental Hygienist in Alternative Practice May Practice as a Sole Proprietorship in California

A Sole Proprietorship is a straightforward and uncomplicated business structure that may be utilized by registered dental hygienists in alternative practice in California. In a Sole Proprietorship, the individual dental hygienist in alternative practice is the sole owner and operator of the dental hygienist in alternative practice business.

Liability Protection for Registered Dental Hygienist in Alternative Practice Sole Proprietors in California

Sole Proprietorships do not provide their owners with liability protection in California. In this type of business structure, the registered dental hygienist in alternative practice is personally responsible for all business debts, liabilities, obligations, and all legal judgments against the dental hygienists in alternative practice business. This means that if the dental hygienist in alternative practice business incurs a debt or is sued, the personal assets of the registered dental hygienist in alternative practice, such as their home, car, and personal bank accounts, can be used to settle these obligations.

The lack of liability protection is a significant disadvantage of operating a dental hygienist in alternative practice business as a Sole Proprietorship and is a critical factor that a registered dental hygienist in alternative practice should consider when deciding on the most appropriate business structure for their dental hygienist in alternative practice business in California.

Taxation of Registered Dental Hygienist in Alternative Practice Sole Proprietors in California

In California, Dental Hygienist in Alternative Practice Sole Proprietorships are subject to pass-through taxation, meaning the business itself is not separately taxed. Instead, the income or loss of the business is passed through to the registered dental hygienist in alternative practice. The registered dental hygienist in alternative practice reports business income and expenses on Schedule C of their personal federal income tax return (Form 1040). The net profit or loss is then reported on the personal tax return of the registered dental hygienist in alternative practice and taxed at individual income tax rates.

In addition to income taxes, a registered dental hygienist in alternative practice practicing as a Sole Proprietorship in California is also subject to self-employment taxes, which cover Social Security and Medicare taxes. At the time of this writing in 2024, this is calculated on Schedule SE of the federal tax return at a rate of 15.3% on the first $168,600 of net income and 2.9% on all net profit in excess of the first $168,600.

At the state level, California has one of the highest state income tax rates in the country, and these rates apply to business income that passes through to the personal tax returns of the registered dental hygienist in alternative practice practicing as a Sole Proprietorship.

When Should a California Registered Dental Hygienist in Alternative Practice Operate as a Sole Proprietorship in California?

A California registered dental hygienist in alternative practice should only consider practicing as a Sole Proprietorship in California when they are starting their dental hygienist in alternative practice and have limited financial resources, will not have employees, do not expect to grow their practice beyond just a few patients, and have substantial insurance coverage for the liabilities and risks associated with their dental hygienist in alternative practice business.

However, as the dental hygienist in alternative practice business grows, the registered dental hygienist in alternative practice should reconsider the use of a Sole Proprietorship for their dental hygienists in alternative practice business as revenue increases, before hiring employees, or as professional liabilities increase. Upon the first to occur of increasing revenue, hiring employees, or increases in professional liability, it will be advantageous for the registered dental hygienist in alternative practice to explore other business structures that offer tax benefits and liability protection.

Two or More California Registered Dental Hygienists in Alternative Practice Professionals May Practice as a General Partnership in California

A California General Partnership used for a dental hygienist in alternative practice business is a business entity in which two or more registered dental hygienists in alternative practice join together to provide professional dental hygienist in alternative practice services in California. In such a setup, all dental hygienist in alternative practice partners share equal rights and responsibilities in managing the business of the dental hygienists in alternative practice business.

Liability Protection for Dental Hygienist in Alternative Practice General Partners in a California General Partnership

General Partnerships in California do not provide dental hygienist in alternative practice partners with liability protection. This means each dental hygienist in alternative practice partner has joint and several personal liability for all business debts, liabilities, obligations, and all legal judgments against the dental hygienist in alternative practice business, including those incurred by other dental hygienist in alternative practice partners which includes acts of malpractice by the other dental hygienist in alternative practice partners. If the California General Partnership providing professional dental hygienist in alternative practice services is sued or incurs debt, the personal assets of each dental hygienist in alternative practice partner, such as their home, vehicles, and personal savings, could be at risk, even if they are not found personally at fault for incurring the debt or committing the act of malpractice.

This lack of liability protection is a considerable drawback for California General Partnerships rendering professional dental hygienist in alternative practice services and something California registered dental hygienists in alternative practice should seriously factor into their decision when considering a California General Partnership for their dental hygienist in alternative practice business in California.

Taxation of General Partnership Dental Hygienists in Alternative Practice Practices in California

In California, dental hygienist in alternative practice businesses structured as General Partnerships are taxed under the pass-through taxation system. This means the California General Partnership itself does not pay income taxes. Instead, the share of the profits or losses of the California General Partnership allocated to each dental hygienist in alternative practice partner passes through to their personal income tax return. The individual dental hygienist in alternative practice partners are responsible for paying federal and state income taxes on their allocated share of the profits of the California General Partnership at their individual income tax rates.

Each dental hygienist in alternative practice partner is also required to pay self-employment taxes, which are Social Security and Medicare taxes for self-employed individuals. At the time of this writing in 2024, this is calculated on Schedule SE of the federal tax return at a rate of 15.3% on the first $168,600 of net income and 2.9% on all net profit in excess of the first $168,600.

California General Partnership earnings are also subject to the California state income tax. The state has a progressive income tax system with rates ranging from 1% to 13.3%, depending on the income of the taxpayer. These rates apply to the allocated share of the California General Partnership income allocated to each dental hygienist in alternative practice partner and passed through to their personal tax returns.

When Should California Registered Dental Hygienists in Alternative Practice Operate as a General Partnership in California?

Based upon the unlimited liability and tax structure of a California General Partnership, a California General Partnership should probably not be considered by registered dental hygienists in alternative practice when practicing as a dental hygienist in alternative practice in California, as there are superior options for a professional practice in California that provide more personal liability protection than a California General Partnership for dental hygienist in alternative practice businesses.

One or More California Registered Dental Hygienists in Alternative Practice May Practice as Dental Hygienists in Alternative Practice as a California Professional Dental Hygienists in Alternative Practice Corporation in California

California Professional Dental Hygienists in Alternative Practice Corporations are a specialized form of professional corporation designed specifically for registered dental hygienists in alternative practice who seek personal liability protection and tax benefits for their dental hygienist in alternative practice business. A California Professional Dental Hygienists in Alternative Practice Corporation is a separate legal entity distinct from its registered dental hygienists in alternative practice owner(s) and permitted non-dental hygienist in alternative practice owner(s), such as licensed dentists and registered dental assistants, referred to collectively as licensed shareholders, which distinguishes it from a California Sole Proprietorship (which is an individual registered dental hygienist personally providing dental hygiene services) or a California General Partnership (which is a dental hygiene group of two or more registered dental hygienists operating a dental hygiene practice together) whether in a dental hygiene office or providing house calls.

Liability Protection from a Professional Dental Hygienists in Alternative Practice Corporation in California

In a California Professional Dental Hygienists in Alternative Practice Corporation, the personal assets of the licensed shareholders are generally protected from business debts, liabilities, obligations, and legal judgments against the California Professional Dental Hygienists in Alternative Practice Corporation. This means that in most instances, if the California Professional Dental Hygienists in Alternative Practice Corporation is sued or incurs debt, the personal assets of the registered dental hygienist in alternative practice owner(s) and other licensed shareholders (such as their home, vehicles, and personal savings) are shielded from creditors.

It is essential to note that this liability protection does not extend to professional malpractice claims against a registered dental hygienist in alternative practice. The personal asset protection applies only to debts and obligations incurred by the California Professional Dental Hygienists in Alternative Practice Corporation, not to the individual actions of a registered dental hygienist in alternative practice. However, when two or more registered dental hygienists in alternative practice are practicing as dental hygienists in alternative practice in a California Professional Dental Hygienists in Alternative Practice Corporation, a malpractice claim against one registered dental hygienist in alternative practice is not a malpractice claim against all the other registered dental hygienists in alternative practice and other licensed shareholders, which is a significant increase in personal liability protection for professional malpractice compared to a California General Partnership.

While the use of a California Professional Dental Hygienists in Alternative Practice Corporation provides liability protection, it does not eliminate the requirement for individual professionals to maintain adequate malpractice insurance coverage or for the California Professional Dental Hygienists in Alternative Practice Corporation to otherwise secure liability insurance for indemnification of its liabilities.

Taxation of Professional Dental Hygienists in Alternative Practice Corporations in California

Professional Dental Hygienists in Alternative Practice Corporations in California can opt to be taxed as personal service corporations subject to double taxation or S Corporations, which alters the tax landscape for these entities. As the vast majority of California Professional Dental Hygienists in Alternative Practice Corporations elect S Corporation taxation, this article will focus on S Corporation taxation of California Professional Dental Hygienists in Alternative Practice Corporations.

With S Corporation status, the California Professional Dental Hygienists in Alternative Practice Corporation itself does not pay income tax. Instead, the income and losses of the California Professional Dental Hygienists in Alternative Practice Corporation pass through to the personal income tax returns of the licensed shareholders.

To qualify for S Corporation status, the California Professional Dental Hygienists in Alternative Practice Corporation must meet certain requirements including having no more than 100 shareholders, all of whom must be U.S. citizens or residents, and having only one class of stock.

One of the key advantages of S Corporation status for a California Professional Dental Hygienists in Alternative Practice Corporation lies in the area of self-employment taxes. Salaries and wages paid to licensed shareholder-employees are subject to payroll taxes (Social Security and Medicare). However, any additional profits distributed to licensed shareholders are not subject to either payroll taxes or self-employment taxes. This can result in significant tax savings.

In terms of state taxes, California taxes S Corporations at a rate of 1.5% of their net income, with a minimum tax of $800 paid annually to the California Franchise Tax Board. Licensed shareholders in a California Professional Dental Hygienists in Alternative Practice Corporation taxed as an S Corporation are also required to pay state income tax on their allocated share of the income of the California Professional Dental Hygienists in Alternative Practice Corporation.

When Should California Registered Dental Hygienists in Alternative Practice Operate Using a Professional Dental Hygienists in Alternative Practice Corporation in California?

A California registered dental hygienist in alternative practice should consider practicing as a Professional Dental Hygienists in Alternative Practice Corporation in California when seeking personal liability protection and tax benefits for their dental hygienist in alternative practice business. This structure is particularly advantageous if the dental hygienist in alternative practice wishes to shield their personal assets from business debts, liabilities, and obligations while also shielding themselves from legal judgments against the California Professional Dental Hygienists in Alternative Practice Corporation, with the exception of individual professional malpractice claims against the registered dental hygienist in alternative practice personally.

If the registered dental hygienist in alternative practice can meet the requirements necessary to qualify for S Corporation status, they can enjoy significant tax advantages. This includes the potential for tax savings through the having no self-employment tax liability on profits distributed to licensed shareholders, and only payroll tax liabilities on a reasonable salary paid to them as an employee of the California Professional Dental Hygienists in Alternative Practice Corporation.

Based upon the availability of both limited liability and tax benefits for the registered dental hygienist in alternative practice, the California Professional Dental Hygienists in Alternative Practice Corporation should be the go-to business entity for California registered dental hygienists in alternative practice.

Secure Your Future with Legal Services from Experts in California Professional Business Structures: Let San Diego Corporate Law Guide Your Business Structure Selection

Choosing the right business structure for your dental hygienist in alternative practice business in California is a critical step for every California registered dental hygienist in alternative practice. It can significantly influence your tax obligations, personal liability, and the overall success of your dental hygienist in alternative practice business. At San Diego Corporate Law, our experienced legal team is well-versed in California business laws and can help you navigate the complexities of forming professional corporations, drafting documents such as dental hygienist in alternative practice corporation bylaws, and complying with the rules and regulations of the Dental Hygiene Board of California and California Dental Hygiene Committee with which each professional registered dental hygienist must comply. Whether you are considering a California Professional Dental Hygienists in Alternative Practice Corporation or other structure for your dental hygienist in alternative practice business, we can provide the guidance necessary to make an informed decision. Contact us today to schedule a consultation and ensure your dental hygienist in alternative practice business starts in California on solid legal footing.