New Jersey’s constraints are split between statute and board rule. The rule text was last revised September 3, 2024. Check the legislation tracker for pending changes.
1. CPOD status
Tier: Strict Two layers combine:- N.J.S.A. 45:6-19 makes anyone who “[i]s a manager, proprietor, operator, or conductor of a place where dental operations are performed” a person practicing dentistry. It defines “manager, proprietor, operator or conductor” to include a person who (1) employs operators or assistants, (2) places dental material or equipment in an operator’s possession under a lease or other compensation agreement, or (3) retains ownership or control of dental material, equipment, or an office and makes it available for operators. Bona fide chattel-mortgage sales are excepted. N.J.S.A. 45:6-13 provides a civil penalty of 2,000 for each subsequent offense, in addition to the uniform enforcement provisions of N.J.S.A. 45:1-1 et seq.
- N.J.A.C. 13:30-8.13 (“Permissible business structures, prohibition on referral fees and fee splitting”) limits dental practice to sole proprietorships; partnerships (including LLPs) of dentists or “closely allied health care professionals”; professional service corporations under N.J.S.A. 14A:17-1 et seq.; and LLCs comprised of dentists or closely allied professionals. “Closely allied” means licensees in dentistry, medicine or its branches, nursing, optometry, or physical therapy.
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. The rule text does not settle whether a licensed dental hygienist qualifies as a “closely allied health care professional” for co-ownership. Verify the question with counsel.3. Professional entity forms
Permitted forms: a professional service corporation (N.J.S.A. 14A:17-1 et seq.) or an ordinary LLC composed of dentists or closely allied professionals. New Jersey has no separate PLLC statute. N.J.A.C. 13:30-8.13 still cites the superseded LLC Act; the current law is the Revised Uniform LLC Act, N.J.S.A. 42:2C. Ownership: Only individuals licensed in the same profession may hold PC shares (N.J.S.A. 14A:17-10(a)); voting trusts and proxies to non-shareholders are prohibited. A dentist may be employed by a permissible format that includes at least one licensed dentist, “provided their professional practice is not supervised and evaluated by a professional who is not a dentist” (N.J.A.C. 13:30-8.13). 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-splitting and management-fee structure
Percentage management fees are banned by rule. N.J.A.C. 13:30-8.13 provides that dentists shall not participate in an arrangement with a non-associate “whereby any remuneration received by that person in payment for the provision of space, professional services, facilities, equipment, personnel, marketing or management services used by the dentist is to be determined or calculated as a fixed percentage of, or otherwise dependent upon, the income or receipts derived from the practice of dentistry.” Narrow exceptions apply to bona fide profit-sharing plans and collection agencies. The rule names marketing and management services, so use compensation that is not tied to practice receipts and confirm fair market value. 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. Dentist noncompetes
No dental-specific noncompete statute was identified in the sources this page relies on; enforceability runs on New Jersey’s general restrictive-covenant law. Verify 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
No DSO registration or disclosure statute. Management agreements are instead constrained by N.J.A.C. 13:30-8.13’s percentage-fee ban and the practice owner’s joint and several responsibility with the treating licensee for board-ordered fee reimbursement on deficient treatment under N.J.A.C. 13:30-8.15. In Galkin v. SmileDirectClub, LLC, No. A-2867-19 (App. Div. June 11, 2021), the Appellate Division rejected a facial challenge to a dentist-owned professional association’s management and succession arrangements because the record did not show that the lay company owned the practice or controlled clinical judgment. The opinion is unpublished and nonprecedential. It shows how one panel analyzed the documents and operating facts, not a statewide safe harbor. The medical decision Allstate Insurance Co. v. Northfield Medical Center, P.C., 228 N.J. 596 (2017), illustrates the contrasting sham-ownership concern. For states that require registration, see Register a DSO.7. Death and transition window
The estate of a deceased PC shareholder may hold shares “for a reasonable period of administration of the estate” without participating in professional decisions, and all shares must be transferred within 375 days of death (90 days after a disqualification) (N.J.S.A. 14A:17-10(a), 14A:17-13(c)). The deceased dentist’s name may remain in the practice name only with “deceased” status disclosure, and must otherwise be removed within six months (N.J.A.C. 13:30-8.19). See Plan for succession.8. Practical structuring notes
The statute expressly reaches equipment and space leases. New Jersey’s expanded proprietor definition covers a party that leases equipment or an office to a practice for compensation or retains control of the office. The professional entity must retain real control, and the DSO’s compensation cannot depend on practice receipts. A flat or cost-plus method may fit the percentage-fee rule, but counsel should confirm the full arrangement against the current N.J.A.C. 13:30-8.13 text.9. Verification 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.