Public Health Law art. 45-A’s material-transaction notice regime reaches dental practices according to the Department of Health’s published FAQ, and DOH has posted dental DSO transactions. The page below states the current $25 million gross-in-state-revenue threshold; recheck it for each transaction.
1. CPOD status
Tier: Strict- Educ. Law § 6602: only a licensed or otherwise authorized person may practice dentistry. The § 6601 practice definition is clinical, so the ownership restriction is built from the license requirement plus entity law.
- Entity law: PCs may issue shares only to individuals authorized to practice the profession in New York (BCL § 1507(a)), organization requires a licensing-authority certificate for every shareholder, director, and officer (BCL § 1503), and PLLC membership is limited to same-profession licensees, with dentistry among the professions singled out for stricter treatment (LLC Law § 1207(a)–(b)).
- Educ. Law § 6512: unauthorized practice, including aiding or abetting it, is a class E felony. Knowingly aiding three or more unlicensed persons is separately covered.
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. Hygienist ownership of a dental practice is not permitted: dentistry entities must be owned by dentistry licensees, and dental hygiene is a separately licensed profession under its own article.3. Professional entity forms
Permitted forms: PC (BCL art. 15), PLLC (LLC Law art. 12: § 1203 formation, § 1207 membership), and professional partnerships or LLPs. Ownership: licensee-only at formation and continuously. The § 1503 certificate process involves review by the education department as well as the Secretary of State. 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 fees are banned by rule. 8 NYCRR 29.1(b)(4), applied to dentistry through 29.5, prohibits sharing professional fees with anyone other than partners, employees, and associates in the professional firm. The rule expressly reaches “any arrangement or agreement whereby the amount received in payment for furnishing space, facilities, equipment or personnel services used by a professional licensee constitutes a percentage of or is otherwise dependent upon the income or receipts of the licensee from such practice.” The Aspen Dental settlement (section 6) treated a pre-set percentage of monthly gross profit as exactly this prohibited fee-splitting. A fixed or properly documented cost-plus fee avoids the rule’s percentage/dependency feature, but those are examples rather than statutory safe harbors; the full arrangement still must preserve professional ownership and control. 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 used for this page. The Aspen settlement, however, removed cross-practice noncompetes as part of a CPOD remedy. A New York DSO noncompete therefore requires regulatory analysis as well as ordinary contract-law review. Verify the provision with counsel. 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 statute. Two adjacent instruments matter:- The Aspen Dental Assurance of Discontinuance (June 18, 2015). The Attorney General settled with Aspen Dental Management, Inc. after making findings about 40 New York offices held by seven dentist-owned practices. The findings addressed a preset percentage of monthly gross profit, consolidated practice accounts the owner-dentists could not access, sales pressure directed at clinical staff, control of clinical hiring and oversight, and cross-practice noncompetes. The assurance imposed a $450,000 civil penalty, a three-year monitor, a fixed-fee requirement, and restrictions on clinical and financial control. It is a party-specific settlement rather than a judicial statewide safe harbor, but it provides specific evidence of the Attorney General’s enforcement position.
- Public Health Law art. 45-A (§ 4550 et seq., effective 2023). Covered health care entities must give DOH written notice at least 30 days before closing a material transaction. DOH’s FAQ expressly includes dental practices and treats acquisitions, affiliations, and transfers of control through an MSA as potentially covered. The current de minimis test asks whether a transaction or related transactions during a rolling 12-month period add at least $25 million in gross New York revenue. DOH’s public transaction list includes the 2025 Smilist dental-practice/DSO asset transaction and 2026 dental-management-company transactions, confirming that the framework can apply to dental deals.
7. Death and transition window
BCL § 1510: on a shareholder’s death or disqualification, the PC must purchase or redeem the shares at book value (as of the end of the month before death or disqualification) within six months after the appointment of the executor, administrator, or other legal representative; the certificate, bylaws, or an agreement may modify the price or shorten the period. The estate may hold shares in the interim, but there is no long-term estate-ownership option. See Plan for succession.8. Practical structuring notes
Use the Aspen findings as an operating checklist. The assurance of discontinuance addressed percentage-of-profit fees, sweep accounts the dentist could not access, sales incentives directed at clinical staff, and DSO control of clinical hiring. A New York management services agreement (MSA) and actual operations should avoid those features. Keep practice bank accounts under PC control, route clinical-staff direction through the owner-dentist, and use compensation that complies with the percentage-fee rule. The Aspen settlement also required advertising to state that the DSO was not a dental provider.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.