HB 2308 was enacted as 2026 Arizona Laws chapter 89. Its dental-insurer ownership restriction takes effect on Arizona’s September 12, 2026 general effective date; the pre-amendment rule remains operative through September 11.
1. CPOD status
Tier: Permissive and registration-based. A.R.S. § 32-1213(A): “A business entity may not offer dental services pursuant to this chapter unless: 1. The business entity is registered with the board pursuant to this section. 2. The services are conducted by a licensee pursuant to this chapter.” The practice definition (A.R.S. § 32-1202) is clinical and contains no proprietor clause. A.R.S. § 32-1261 makes it a class 6 felony to practice, advertise, or operate a dental business or office “without a valid license or business entity registration.” Registration is therefore the route for lawful lay operation. The clinical line runs both ways under § 32-1213(L): the entity may not “establish or enforce a business policy or practice that may interfere with the clinical judgment of the licensee,” and the licensee may not disregard or interfere with the entity’s business-operations policies.2. Other professions
This page covers dentistry only. Medicine, optometry, veterinary practice, and other professions are governed by different statutes and boards, even within the same state. For medical-practice sources, use the MSO-PC Wiki.3. Professional entity forms
Dentist-owned PCs and PLLCs are exempt from business-entity registration when shares are “exclusively owned by dentists who are licensed pursuant to this chapter” and the entity is formed under Title 10, chapter 20 (professional corporations) or Title 29 (PLLCs) (§ 32-1213(J)(3)). Other exemptions cover dentist-only sole proprietorships and partnerships, certain Title 20 insurance entities, federally regulated facilities, and estate administrators (§ 32-1213(J)). Because lay entities may register, a hygienist, physician, spouse, or investor may own a registered business entity offering dental services. They cannot own a J(3)-exempt dentist-only PC or PLLC. One additional ownership bar applies: an individual with a surrendered or revoked dental or hygiene license in any state may not hold a majority (over 50%) interest in a registered entity. Publicly held companies are excepted (§ 32-1213(N)). Also confirm before filing:- Naming rules, designator requirements, and any limits tied to licensed owners’ names; several states regulate dental trade names separately
- Board pre-approval or certificates, whether the dental board must act before (or after) the secretary of state will file
- Officer and director licensure, including states that restrict these roles as well as ownership to licensees
4. Fee structure
No Arizona statute or rule banning percentage or revenue-linked management fees was located in this research. In a registered-entity structure, the entity owns the revenue. If a DSO instead supports a dentist-owned PC or PLLC, draft the arrangement against the § 32-1213(L)(2) no-interference rule. Verify the fee structure with counsel. For the MSA, test whether a percentage-of-collections fee is permitted under the state’s dental, fee-splitting, referral, tax, and contract rules. Several states expressly restrict revenue-linked dental management fees, and the Aspen Dental settlements imposed related party-specific terms. Flat and cost-plus formulas are not automatic safe harbors; the services, calculation, amount, control rights, and actual payments still matter. See Fee-splitting rules and Set the management fee.5. Noncompetes
No dental-specific noncompete statute was identified for this page. Verify current Arizona law with counsel before including one. Federal noncompete policy changed substantially in 2025 and 2026. The FTC’s Non-Compete Rule was vacated, the agency dismissed its appeals in September 2025, and the rule was removed from 16 C.F.R. pt. 910 effective February 12, 2026. State law remains central. Dental enforcement resolutions in New York and California have also restricted noncompetes for the settling parties as a corporate-practice remedy. Verify the current rule, worker, agreement type, transaction context, effective date, and remedy in this state. See the legislation tracker.6. DSO-specific law and registration
A.R.S. § 32-1213 (“Business entities; registration; renewal; civil penalty; exceptions”) governs the registration regime. The current text requires disclosure of services offered, the responsible dentist for each office, officers and directors, and a records custodian. Each branch office needs a separate registration, renewed every three years (§ 32-1213(A)–(D)). The statute also requires 30-day notice of changes (E), a written records protocol that includes patient notification on sale or termination (F), and dissolution and closure notice (G). Board discipline may include civil penalties up to $$2,000 per violation (H). The board publishes registration forms at dentalboard.az.gov. See Register a DSO. SB 1226 (Laws 2023, ch. 118) shifted patient-record maintenance responsibility to the practice owner or registered entity, added the records-custodian designation and change notices, expanded board records-inspection powers, and required the board’s business-entity member to be an employee or owner of a registered entity. HB 2308 (2026), enacted as chapter 89, adds § 32-1213(O)–(P). Effective September 12, 2026, a dental insurer or dental-insurer holding company may not own any interest in a business organization regulated by the Board. For this rule, the act defines a holding company by at least 10% ownership or voting rights in the dental insurer. This is a targeted insurer-affiliation prohibition, not a repeal of Arizona’s general registered-entity pathway.7. Death and transition
An estate administrator or executor is exempt from registration for up to one year after board notice of the dentist’s death or incapacity (§ 32-1213(J)(5), cross-referencing § 32-1270).8. Practical structuring notes
- For an Arizona lay-owned practice, confirm that each office is registered and that each triennial renewal is calendared. Operating unregistered is a felony (§ 32-1261).
- The records custodian designation and 30-day change notices added by SB 1226 are easy compliance misses in multi-office groups.
- Insurer-affiliated transactions need a date-specific closing analysis: the new prohibition is enacted but not operative until September 12, 2026.
9. The standing checklist
- Confirmed the permitted entity form for dentistry in this state
- Confirmed whether dental board pre-approval or a certificate is required before filing
- Confirmed whether officers and directors must be licensed dentists
- Confirmed the management fee structure is lawful here, including any restriction on revenue-linked fees
- Clinical carve-out drafted against this state’s current statutory language, including any enumerated control prohibitions
- Transfer restriction and succession documents checked against this state’s death-transition window
- Noncompete provisions checked against current state law
- DSO foreign-qualified before it has employees here
- Any DSO registration, licensure, or disclosure obligation identified and calendared
- Trade-name and advertising-disclosure rules for dental practices checked
10. Sources and where to verify
For the cases and statutes referenced above, see DSO & dental case law and the 51-jurisdiction table. For enacted and pending legislation, see the dental legislation tracker.