> ## Documentation Index
> Fetch the complete documentation index at: https://dso.getlemma.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Step 1: Pick your state and entity types

> Choose your launch state by reading its dental practice act: proprietor clauses, DSO registration regimes, ownership pathways, fee-structure bans, and where to organize the DSO.

Your launch state determines the professional entity form, corporate practice of dentistry (CPOD) rules, available management-fee structures, and any DSO filing. Document the choice before forming entities or drafting the agreement stack because changing states later can require new filings, contracts, and payer work.

## What Bluebird did

Sam and Dr. Okafor chose **Georgia** for the launch because Dr. Okafor is licensed there and their market analysis identified demand in metro Atlanta. Their state-law review concluded that Georgia permits a dentist to practice through an all-dentist professional association, professional corporation, or LLC.<sup>1</sup> For this example, counsel also documented the ownership, fee, and support-company filing analysis before drafting the DSO-PC structure. They organized the DSO as a **Delaware LLC** in anticipation of institutional investment and foreign-qualified it in Georgia.

Your answer will differ. Here is how to get to it.

## Answer these four questions

### 1. Where is your dentist licensed, and where is your demand?

These have to overlap. Determine which license is required for the patient's location and which persons or entities may own the selected practice form. Many states require a dentist licensed there; others authorize specified lay, mixed, or institutional ownership subject to conditions. A multi-state license does not by itself answer entity eligibility.

Do not pick a state for regulatory convenience alone. The patient's location at the time of service generally governs which license and which payer contract apply, and teledentistry does not change licensure requirements. Launch where your patients are.

### 2. What entity forms does that state's dental practice act allow?

There are three professional entity forms in common use, and the choice is usually dictated rather than optional:

| Form     | Full name                              | Where you'll see it                                                                                                     |
| -------- | -------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- |
| **PC**   | Professional corporation               | The default in most states. California dental corporations take this form; there is no PLLC option for dentistry there. |
| **PLLC** | Professional limited liability company | Available in many states; several states require every member to be a licensed dentist.                                 |
| **PA**   | Professional association               | Florida (ch. 621 "P.A." entities) and Georgia, among others.                                                            |

Look up your state's page, for example [Texas](/reference/legal/states/texas), [California](/reference/legal/states/california), [Georgia](/reference/legal/states/georgia), for the permitted forms, the name requirements, and any board certificate step.

Three things to check specifically:

* **Name rules.** Most states require a designator ("P.C.", "Professional Corporation", "PLLC", "P.A."), some constrain the name to the surnames of licensed owners, and several require the dental board to pre-approve or register a trade name. This constrains your brand: Bluebird Dental, P.C. may need to be *Maya Okafor, D.D.S., P.C.* doing business as Bluebird Dental.
* **Board certificates before or after filing.** Some states put the dental board in the formation path: West Virginia entities need a certificate of authorization from the Board of Dentistry, and an Arkansas dental corporation must register with the Board of Dental Examiners before it opens. These add weeks. See [Step 3](/start/zero-to-paid/form-the-pc).
* **Officer and director licensure.** Several states require that directors and officers, not just shareholders, be licensed dentists. That affects who can sit on your PC's board, and it means the DSO's executives cannot.

### 3. What CPOD rules apply, and how do they affect the structure?

Do not rely on a medical CPOM summary for a dental structure. Dental practice acts often contain their own ownership, control, filing, and fee provisions. Check your state's row on [DSO laws by state](/reference/legal/dso-laws-by-state) for these four areas:

* **Proprietor clauses.** Some practice acts expressly include *owning, maintaining, or operating a dental office* within the practice of dentistry. In those states, ownership and proprietorship may resolve the lay-owner question without a separate control-factor analysis. See [Corporate practice of dentistry](/concepts/model/corporate-practice-of-dentistry).
* **Role-specific dental filings.** Texas registers entities providing specified support services; Kansas registers non-dentist administrative-service entities; Nevada registers a person managing a dental business; Arizona registers the entity offering dental services; and New Mexico licenses a covered non-dentist owner. If your launch facts trigger one, the filing is part of Step 4. See [Register a DSO](/guides/compliance/register-a-dso).
* **Ownership permissions are not binary.** Arizona and New Mexico use entity- or owner-level regulatory paths; North Dakota permits a defined minority lay interest; Kentucky now authorizes entity ownership with reserved clinical control; and other states reach different results through their dental and entity statutes.<sup>2</sup> Use the 51-jurisdiction table rather than a reusable "permissive state" list.
* **Fee formulas are separate from ownership.** Nevada, New Jersey, New York, and North Carolina expressly restrict specified revenue-dependent formulas, while Maryland's permitted-support pathway uses predetermined fixed compensation under its own conditions.<sup>3</sup> Flat and cost-plus structures still require lawful services, control allocation, calculation terms, and any applicable fair-market-value or referral analysis; they are not automatic safe harbors. See [Fee-splitting rules, explained](/concepts/model/fee-splitting) and [Evolve the fee structure](/guides/agreements/evolve-the-fee-structure).

### 4. Are the rules about to change?

Recent legislation has changed dental ownership and management rules in several states. Before committing, check the [legislation tracker](/reference/legal/dental-legislation-tracker) for your state. Examples include:

* **California** enacted SB 351, effective January 1, 2026, barring private equity groups and hedge funds from controlling specified clinical and administrative functions, and the operative text runs to "physician or dental practice" throughout, so dental coverage is express.<sup>4</sup>
* **Colorado** Dental Board Rule 1.7 (under SB 25-194) is scheduled to become operative January 1, 2027. It bars a DSO from acting as proprietor and provides a real-property-only lessor safe harbor that is unavailable when the same person also supplies dental material or equipment.<sup>5</sup>
* **Kentucky** took a different approach: KRS 313.075 (effective April 13, 2026) lets entities own and operate practices, paired with enumerated clinical-control prohibitions.<sup>2</sup>
* **Oregon's** SB 951 **does not reach dentistry** because dentists sit outside its definitions.<sup>6</sup> Confirm whether a medical-sector law includes dental practices before applying it to the group.

## Where to organize the DSO

In the common support-company model, the DSO is an ordinary business entity rather than a professional entity. Formation does not authorize it to practice dentistry, and state law still determines which assets, staff, and functions it may control:

| Option              | When it fits                                                                                                                                 |
| ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- |
| **Delaware LLC**    | Common when institutional capital is likely. Investors may be familiar with the law; later conversion still requires legal and tax analysis. |
| **Delaware C-corp** | When you're raising priced venture rounds now, or issuing employee equity broadly.                                                           |
| **Home-state LLC**  | May fit a bootstrapped, single-state company with no near-term raise. It can avoid maintaining a second domestic jurisdiction.               |

For each state, apply that state's foreign-entity nexus and exemption rules to the support company's actual employees, offices, contracts, assets, and activity. Separately test any dental-role filing based on its own defined actor and conduct; it may attach to a support company, care-delivery entity, business manager, or non-dentist owner. See [Register entities in additional states](/guides/formation/register-foreign-entities) and [Register a DSO](/guides/compliance/register-a-dso).

<Tip>
  Do not choose the support company's domicile merely to avoid an operating-state filing. Domicile, foreign qualification, tax nexus, employer registration, and dental-role filings are separate analyses.
</Tip>

## Your artifact from this step

Write down and keep:

* **Launch state**, and the dental license that supports it
* **Professional entity form** (PC / PLLC / PA) and the statute that requires it
* **Name** that satisfies the state's professional-entity and dental-board naming rules, plus your DBA if the brand differs
* Whether a **board certificate or registration** is required for the PC, and what it takes
* Whether the state regulates a **support company, care-delivery entity, dental business manager, or non-dentist owner**, and the filing deadline if triggered
* Whether **percentage-of-collections fees** are lawful in that state
* **DSO domicile**, and the list of states it will need to foreign-qualify in

## Checklist

* [ ] Confirmed the dentist holds an active, unrestricted license in the launch state
* [ ] Read the state's row on [DSO laws by state](/reference/legal/dso-laws-by-state) and its CPOD state page
* [ ] Checked the [legislation tracker](/reference/legal/dental-legislation-tracker) for pending or recent changes
* [ ] Confirmed the permitted entity form and name requirements
* [ ] Identified any board certificate step and its lead time
* [ ] Checked every role-specific dental filing for the actual support, ownership, management, and care-delivery facts
* [ ] Confirmed whether percentage-of-collections fees are lawful
* [ ] Chosen DSO domicile
* [ ] Engaged healthcare counsel licensed in the launch state

## Next

<Card title="Step 2: Find your friendly dentist" icon="arrow-right" href="/start/zero-to-paid/find-your-friendly-dentist">
  Recruit and vet the dentist who will own and govern the professional entity.
</Card>

## Sources

1. O.C.G.A. § 43-11-47(a)(7)(A). [Statute text (FindLaw, current Georgia Code)](https://codes.findlaw.com/ga/title-43-professions-and-businesses/ga-code-sect-43-11-47/).
2. Ky. Rev. Stat. § 313.075 (effective April 13, 2026). [Statute (Kentucky Legislature)](https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=56883).
3. Nev. Rev. Stat. § 631.215(2)(i), [text](https://nevada.public.law/statutes/nrs_631.215); N.J.A.C. 13:30-8.13; 8 NYCRR 29.1(b)(4); 21 NCAC 16X .0101, [rule PDF](http://ncdentalboard.org/PDF/21%20ncac%2016x%20.0101.pdf). State-by-state detail: [DSO laws by state](/reference/legal/dso-laws-by-state).
4. Cal. S.B. 351 (2025), adding Health & Safety Code §§ 1190–1191, effective January 1, 2026. [Bill text (leginfo)](https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260SB351); Benesch, [California Enacts SB 351](https://www.beneschlaw.com/insight/california-enacts-sb-351-new-restrictions-on-private-equity-and-hedge-fund-involvement-in-physician-and-dental-practices/).
5. Colo. Dental Board Rule 1.7, under S.B. 25-194 (2025). Dykema, [Colorado Dental Board promulgates DSO regulations](https://www.dykema.com/news-insights/colorado-dental-board-promulgates-regulations-on-dsos-effective-january-1-2027.html).
6. ORS 679.020(2), [ORS ch. 679](https://www.oregonlegislature.gov/bills_laws/ors/ors679.html); Or. S.B. 951 (2025 Reg. Sess.), [enrolled bill](https://olis.oregonlegislature.gov/liz/2025r1/Downloads/MeasureDocument/SB951) (definitions exclude dentistry).