A dentist non-compete in Utah is void if it was entered into on or after May 6, 2026. Dentists are named healthcare workers under the amended Post-Employment Restrictions Act, and the statute says an agreement violating the ban is void rather than merely unenforceable in part.

Last updated: November 2026

Key Takeaways

The statute, in the order it applies

Three sections do the work, and reading them in sequence is the fastest way to get to an answer.

First, the ban. Utah Code 34-51-201(1)(b) provides that on or after May 6, 2026, a person and a healthcare worker may not enter into a healthcare non-compete agreement. Subsection (1)(c) makes an agreement violating Subsection (1) void.

Second, the definitions. Section 34-51-102(5)(a) defines healthcare worker by listing licensed occupations, and subparagraph (xii) is “a dentist as that term is defined in Section 58-69-102.” Section 34-51-102(4) defines a healthcare non-compete agreement as one under which, after the worker no longer works for or with the person, the worker will not engage in a service they may provide under the scope of their license, either for a restricted period or within a specific geographic area.

Third, the exceptions. Section 34-51-202(1) preserves a reasonable severance agreement mutually and freely agreed upon in good faith at or after the time of termination, and a covenant related to or arising out of the sale of a business if the restricted individual receives value related to the sale.

Who is covered and who is not

The list in Section 34-51-102(5)(a) runs through more than thirty occupations, including advanced practice registered nurses, licensed practical nurses, physicians, physician assistants, optometrists, podiatric physicians, psychologists, and a range of mental health and social work licenses. Dental auxiliaries are conspicuously absent from it.

Nonsolicitation is limited but not eliminated

Section 34-51-203, enacted by the same bill, provides that on or after May 6, 2026 a person and a healthcare worker may not enter into a nonsolicitation agreement that prevents the healthcare worker from informing a patient of their current place of employment or their future place of employment. An agreement violating that is void.

Read carefully, that provision targets one specific restraint. It does not abolish nonsolicitation agreements generally. Section 34-51-102(7)(b) separately excludes nonsolicitation agreements, nondisclosure agreements, and confidentiality agreements from the definition of a non-compete agreement altogether.

So a practice can still protect its staff from being recruited away and its confidential information from being used. What it cannot do is prevent a departing dentist from telling patients where they went.

The fee-shifting provision changes the risk calculation

Section 34-51-301 provides that if an employer seeks to enforce a non-compete agreement or a healthcare non-compete agreement through arbitration or by filing a civil action, and the agreement is determined to be unenforceable, the employer is liable for the employee’s costs associated with arbitration, attorney fees and court costs, and actual damages.

Before 2026, an overbroad covenant carried the risk of being narrowed or ignored. Now attempting to enforce a void covenant is an affirmative liability. A practice holding an unrevised template is not merely unprotected. It is holding an instrument that can cost money if anyone acts on it.

What a practice can actually do instead

The protection has to shift from restraint to structure, and the tools that remain are real.

• Staff nonsolicitation. Enforceable and often more valuable than a patient restriction, because rebuilding a trained team is slower than replacing a producer.
• Confidentiality and trade secret protection. Fee schedules, payer contracts, patient lists, and systems all qualify for protection if actually treated as confidential.
• Notice periods. A meaningful notice obligation, with a real consequence for breach, buys time to schedule around a departure.
• Compensation and ownership paths. The retention mechanism that survived is the one that always worked best anyway.
• The sale structure. When an owner leaves, structuring the exit as a purchase of their interest with a covenant tied to the consideration puts the restriction inside the surviving exception.
• Severance. Section 34-51-202(1)(a) preserves a covenant in a reasonable severance agreement agreed at or after termination, though it remains subject to common law requirements.

Agreements signed before May 6, 2026

The ban applies to agreements entered into on or after that date. An older agreement is analyzed under the law that applied when it was made, including the general one-year limit in Section 34-51-201(1)(a) and the common law requirements that have always applied to restrictive covenants.

That is not a reason to rely on an old covenant. Enforcement still turns on reasonableness in scope, duration, and geography, and Section 34-51-301 fee shifting applies to an unsuccessful enforcement attempt regardless. If a practice is considering acting on a pre-2026 covenant against a dentist, that is a conversation to have before filing anything.

What this means for practice value

A practice whose production depends heavily on associates now carries a risk that cannot be papered over. Buyers know it, and a well-advised buyer will ask about the production split during diligence.

The answer is not a covenant. It is a retention story: compensation that reflects the market, a defined path to ownership where that fits, and a working environment people do not want to leave. That has always been the durable version of retention. Utah has now made it the only one.

What I see most often

In the practices I have worked with, the associate agreement is the last document anyone thinks about and the first one that matters when someone resigns. Since the 2026 change, the recurring problem is not a badly drafted covenant. It is an unrevised one, still sitting in the file, giving an owner a false sense that departures are controlled. The conversation that follows a resignation is much better when the owner already knows the covenant is void than when they find out from the associate’s lawyer.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, associate dentist employment agreements, and partner buy-ins and buy-sell agreements.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

An associate dentist employment agreement in Utah now does less than it used to. The non-compete that used to anchor the document is void, so the clauses that actually protect a practice are the compensation formula, the notice period, the records provisions, and the nonsolicitation terms that survived.

Last updated: November 2026

Key Takeaways

What changed, and why old templates are now a liability

House Bill 270 of the 2026 General Session rewrote Utah’s Post-Employment Restrictions Act. Utah Code 34-51-201(1)(b) provides that on or after May 6, 2026 a person and a healthcare worker may not enter into a healthcare non-compete agreement, and subsection (1)(c) makes an agreement that violates it void.

Section 34-51-102(5)(a)(xii) lists a dentist among the covered healthcare workers. The definition of a healthcare non-compete agreement in Section 34-51-102(4) reaches any agreement barring the worker, after they stop working for you, from providing a service they may provide under the scope of their license, either for a period of time or within a geographic area.

The reason a stale template is worse than no template is Section 34-51-301. If an employer seeks to enforce a covenant through arbitration or a civil action and it is determined to be unenforceable, the employer is liable for the employee’s arbitration costs, attorney fees and court costs, and actual damages.

What still works in an associate dentist employment agreement

The compensation formula deserves a worked example

Most associate disputes are not about the percentage. They are about what the percentage is applied to.

A formula of “30 percent of adjusted production” raises four questions the agreement should answer explicitly: adjusted by what, whether it is production or collections, what is deducted before the percentage applies, and who bears write-offs and insurance adjustments the associate did not negotiate.

The clauses that avoid the argument:

• State whether compensation is on production or collections, and define the term.
• List every deduction taken before the calculation, including lab, specific supplies, and any allocation of overhead.
• Say who absorbs contractual write-offs, courtesy adjustments, and uncollectible accounts.
• State the pay period and the timing, consistent with Utah’s wage payment requirements in Utah Code 34-28-5.
• Address what happens to collections received after the associate leaves on work they performed.
• Attach a sample calculation using real numbers. One page prevents most of these disputes.

Guaranteed minimums deserve their own attention. If a guarantee is recoverable against future production, say so, and say what happens to an unrecovered balance if employment ends.

Clinical autonomy and the practice’s own exposure

An associate agreement should say who decides clinical matters, and the answer should be the treating dentist.

This is not only good practice. Utah Code 58-69-804(2) bars a licensee from permitting an unlicensed person to direct, participate in, or interfere in the licensee’s practice of dentistry, and Section 58-69-501 now treats directing or interfering with a dentist’s judgment as unlawful conduct.

Production targets tied to specific procedures, or bonus structures that reward case acceptance rates, sit uncomfortably close to that line. A production expectation stated as a schedule and availability commitment is on much safer ground than one stated as a dollar target for a particular treatment category.

Malpractice coverage and tail

Say who carries professional liability coverage, at what limits, whether it is claims-made or occurrence, and who pays for tail coverage when the relationship ends.

A claims-made policy with no tail leaves the associate exposed for treatment already rendered, and leaves the practice arguing about it after the associate has left. It is a two-sentence provision that avoids a genuinely expensive problem.

Hygienists and assistants are a different analysis

The healthcare worker list in Section 34-51-102(5)(a) runs through more than thirty licensed occupations, including registered nurses, licensed practical nurses, physicians, physician assistants, optometrists, and mental health professionals. Dental hygienists and dental assistants are not on it.

That means the healthcare non-compete ban does not reach them, and agreements with them are analyzed under the general rule, including the one-year limit on post-employment restrictions in Section 34-51-201(1)(a). Whether such a covenant is worth having with a hygienist is a separate business question, and often the answer is no.

The exception nobody expects

Section 34-51-102(5)(b) excludes from the definition of healthcare worker an individual who holds a covered license but “whose employment or contractual agreement does not require or involve practicing under the scope of the individual’s license.”

So a dentist hired into a purely administrative or executive role that does not involve practicing dentistry is outside the ban. That is a narrow carve-out, and it should not be used as a workaround by labeling a clinical role administratively. The test is what the agreement requires the person to do.

Specialty notes

Orthodontics. An associate who takes over cases in progress needs a clear provision on responsibility for treatment started by someone else, and on compensation for visits on prepaid cases where no new revenue arrives.

Pediatric dentistry. Where public payers are significant, the agreement should address credentialing, who bears the cost and delay, and what happens if enrollment is not complete on the start date.

Periodontics and oral surgery. Anesthesia and analgesia permits are issued to the individual under Utah Code 58-69-301, so the agreement should state who holds which permit and what happens if one lapses.

What I see most often

In the associate agreements I have reviewed, the document is usually a form that came from another practice, and the two provisions that matter most are the two that were never customized. The compensation formula uses a term like adjusted production without defining it, and the restrictive covenant was copied from a version drafted before Utah changed the law. The first produces an argument in month four. The second produces an unenforceable clause that, if anyone ever tries to enforce it, shifts fees to the other side. Both are fixed in a single revision.

Common mistakes

• Reusing a pre-2026 template with a non-compete still in it.
• Leaving “adjusted production” undefined.
• No sample compensation calculation.
• Silence on collections received after the associate leaves.
• No notice period, so the practice learns of a departure with two weeks of scheduled patients booked.
• Nothing about tail coverage.
• A patient nonsolicitation clause drafted more broadly than Section 34-51-203 permits.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah and business lawyer.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

A dental practice partnership works well until someone wants out, gets sick, gets divorced, or stops pulling their weight. The buy-in negotiation is the only time all owners are motivated to write fair rules, because nobody yet knows which one of them will need them.

Last updated: November 2026

Key Takeaways

The three ways a dental practice partnership is formed

The mechanics differ and so do the tax consequences, so name the structure early.

A staged buy-in is common because it lets both sides test the relationship. It also creates the most drafting work, because you have to answer what happens at every point along the path rather than only at the end.

The entity behind a dental practice partnership matters more than people expect

Utah permits a dentist to practice as a partner in a lawfully organized partnership under Utah Code 58-69-804(1)(c), but permitted is not the same as advisable.

In a general partnership, Utah Code 16-18-306 makes all partners liable jointly and severally for the debts, obligations, and other liabilities of the partnership. A person who becomes a partner is not personally liable for obligations incurred before they joined, and a limited liability partnership changes the analysis, but the default rule is exposure.

Most multi-owner dental practices are better served by a limited liability company. Utah Code 16-20-304 makes a company’s debts solely the company’s, and provides that failure to observe formalities is not a ground for imposing liability on a member or manager.

If the practice is a professional corporation, remember that Section 16-11-7 voids shares issued to a person not licensed in the same profession, and Section 16-11-13 requires a buyback within 90 days if an owner becomes disqualified. Those rules interact directly with a buy-sell agreement and should be drafted together rather than in separate documents that contradict each other.

What the buy-sell agreement has to decide

This is the document that governs the relationship on its worst day. It should answer each of the following in a way a stranger could apply without asking anyone what was meant.

• Triggering events. Death, disability, retirement, voluntary withdrawal, termination for cause, loss of license, bankruptcy, and divorce.
• Who buys. The practice, the remaining owners, or an option in a stated order.
• Valuation method. A formula, an appraisal process, or a stated value updated annually. Name the method and a tie-breaker.
• Payment terms. Lump sum or installments, interest rate, security, and what happens on default.
• Funding. Life insurance and disability insurance sized to the obligation.
• Restrictions after exit. What the departing owner may and may not do, drafted against the current statute.
• Records and patient communication. Who notifies patients, and how.

The valuation clause is the one that most often fails. An agreement that says value will be agreed by the parties, or determined by the practice’s accountant without saying how, converts a mechanical process into a dispute. Name a method, name who applies it, and name what happens if the two sides get different numbers.

Restrictive covenants no longer do the work

Practices used to protect themselves against a departing co-owner with a covenant in the operating agreement. Utah narrowed that considerably.

Utah Code 34-51-201(1)(b) voids a healthcare non-compete agreement entered into on or after May 6, 2026, and Section 34-51-102(5)(a)(xii) makes a dentist a healthcare worker. Section 34-51-203 voids a nonsolicitation term that would stop a departing dentist from telling patients where they are going.

The exception in Section 34-51-202(1)(b) preserves a covenant related to or arising out of the sale of a business where the restricted individual receives value related to the sale. A buyout of a co-owner’s interest is a considerably better fit for that exception than an ordinary employment covenant, because the departing owner is genuinely receiving sale value. That is a drafting opportunity, and it argues for structuring the exit as a purchase of the interest with the covenant tied to it explicitly.

What has not changed is that ordinary nonsolicitation of staff, and nondisclosure and confidentiality obligations, sit outside the definition of a non-compete agreement entirely.

Governing a dental practice partnership while everyone is still getting along

Two owners with equal interests and no tie-breaker is the most common deadlock structure in professional practices, and it is entirely avoidable.

Utah Code 16-20-107 sets out what an operating agreement may and may not do, including provisions it cannot eliminate, such as the duty of loyalty and care and the obligation of good faith and fair dealing. Within those limits, the terms worth settling are which decisions need unanimity and which need a majority, whether either owner can force a capital call, how compensation and distributions are set, what production or schedule commitments each owner has, and what mechanism breaks a tie.

Common deadlock mechanisms include a neutral third party with a casting vote, mediation followed by binding arbitration, and a buy-sell trigger where one owner names a price and the other chooses whether to buy or sell at it. Any of them beats litigation between two dentists who share a waiting room.

Funding the obligation

A buy-sell agreement that obliges the surviving owner to purchase a deceased owner’s interest for a substantial sum, with no insurance behind it, is a promise to a grieving family that the practice may not be able to keep.

Life insurance is the standard answer for death. Disability buyout coverage addresses the harder case, since disability is more likely than death during a working career and the definitions in the policy need to match the trigger in the agreement. Review both when the practice value changes materially, because a policy sized to a valuation from eight years ago funds an obligation that no longer exists.

What I see most often

In the dental and orthodontic practices I have worked with, the buy-in gets papered and the buyout does not. The parties negotiate the entry price closely, then accept a short operating agreement whose exit provisions were never really read, because at that moment everyone is optimistic and nobody wants to negotiate their own departure. Years later the exit provisions are the only ones that matter, and they turn out to say that value will be agreed by the parties. The hour spent on the exit terms during the buy-in is worth more than every hour spent on the entry price.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, choosing the right entity, and the Utah Uniform Partnership Act.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

A dental service organization is a management company. It does not practice dentistry, it owns or provides everything around the dentistry, and it earns a fee for doing so. In Utah the ownership side of that arrangement is simple. The fee and the decision rights are where the legal work is.

Last updated: November 2026

Key Takeaways

What a dental service organization actually is

The label covers a wide range. At one end, a dental service organization is a back-office provider handling billing, payroll, human resources, compliance, marketing, purchasing, and information technology for a fee. At the other end it is a private-equity-backed platform that has acquired the practice outright and employs the dentist.

Between those poles sit many arrangements: group practices that formed a shared services entity, regional platforms, and management companies owned by dentists themselves. The legal analysis does not turn on the label. It turns on three questions.

• Who owns the practice entity?
• How is the management company paid?
• Who decides what?

Ownership: the easy question in Utah

Utah Code 58-69-804(1) permits a dentist to practice through a professional corporation, a limited liability company, or an ordinary business corporation, among other forms, and it says nothing about who may hold the equity.

That is a meaningful difference from states with a strict corporate practice doctrine, where a management company must use a captive professional entity owned by a licensed nominee, with a stack of agreements binding that nominee to the platform. Utah does not require that architecture.

One caveat carries over from entity law rather than dental law. If the practice is a professional corporation, Utah Code 16-11-7 restricts who may hold shares and makes non-conforming issuances void, and Section 16-11-8 restricts officers and directors. A management company acquiring equity in a Utah practice will generally want that practice in an LLC or a business corporation.

The fee: the hard question in Utah

Here is the provision that should be read before any management fee is agreed.

Unprofessional conduct includes “sharing professional fees with an unlicensed person, or paying any person for sending or referring a patient.”

Utah Code 58-69-502(1)(a)

Note who that binds. It appears in the chapter governing dentists, and unprofessional conduct is something a licensee commits. The management company is not licensed and is not the subject of the rule. The dentist is.

That asymmetry is the reason a dentist should have the fee provision reviewed independently rather than relying on the platform’s assurance that the structure is standard. Standard elsewhere is not the same as sound here.

The structures worth examining closely are a fee stated as a flat percentage of collections or of practice revenue, any fee that varies with production, marketing arrangements priced per new patient, and any bonus tied to case acceptance. Fees tied to cost, to fair market value of services actually delivered, or to a fixed amount adjusted periodically sit on different ground. This is a drafting problem with real answers, not a reason to avoid management arrangements altogether.

Decision rights: where the clinical line sits

Utah addresses control directly, and recently sharpened it.

Section 58-69-804(2) provides that regardless of the form in which a licensee practices, the licensee may not permit an unlicensed person to direct, participate in, or interfere in the licensee’s practice of dentistry. Utah Code 58-69-501 now lists directing or interfering with a licensed dentist’s judgment and competent practice of dentistry as unlawful conduct, a step up from unprofessional conduct, added in 2025.

A well-drafted management services agreement therefore separates two categories explicitly rather than leaving them blurred.

The marketing row deserves a second look for specialists. Section 58-69-502(2) makes it unprofessional conduct to advertise as a specialist without the education the American Dental Association specifies, and lists the specific words that trigger it. A management company running the marketing does not carry that risk. The dentist does.

Term, exit, and what happens at the end

The provisions that determine whether an arrangement is a partnership or a trap are usually near the back of the document.

• How long is the initial term, and does it renew automatically?
• Can the dentist terminate without cause, and what does that cost?
• What is the definition of cause, and is it symmetrical?
• Who owns the patient records if the relationship ends?
• Who holds the lease, and can the practice continue in the space?
• Who owns the practice name, phone number, domain, and review profiles?
• What restrictions apply to the dentist afterward, and in which document do they sit?

That last question changed in 2026. Under Utah Code 34-51-201(1)(b) a healthcare non-compete agreement entered into on or after May 6, 2026 is void, and Section 34-51-102(5)(a)(xii) includes dentists. The surviving exception in Section 34-51-202(1)(b) requires that the restricted person receive value related to the sale of a business. A restriction in a pure management agreement, with no sale, has a serious problem.

Questions a dentist should ask before signing

• How is the fee calculated, and can I see it applied to last year’s actual numbers?
• What decisions can the management company make without me?
• What is written down as remaining exclusively mine?
• What happens to the records, the space, and the phone number if we part ways?
• Who is responsible if a compliance problem arises from something the management company did?
• Does the agreement indemnify me for that, or only the other direction?

What I see most often

In the arrangements I have reviewed, the fee provision gets negotiated on the number and not on the structure, and the clinical control language is accepted as boilerplate because it sounds reassuring. Both deserve the opposite treatment. The number is easy to compare against alternatives. The structure is what determines whether the dentist is exposed under a Utah rule that runs to the licensee and not to the company. And the clinical control language is worth making specific, because “the dentist retains control of all clinical matters” is a sentence, while a list of enumerated decisions is a protection.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, selling your dental practice to a DSO, and who can own a dental practice in Utah.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

Choosing a dental practice entity in Utah is really two decisions wearing one name. First, which legal form the practice takes, which controls who may own it and who is liable. Second, how that form is taxed, which is a separate election and not an entity at all.

Last updated: November 2026

Key Takeaways

The forms Utah allows

Utah Code 58-69-804(1) lists the permitted forms directly, and the list is broad. It includes an ordinary limited liability company and an ordinary business corporation alongside the professional corporation, and it does not restrict who may own any of them.

So the dental practice entity question is not “what am I allowed to use.” It is “what do I want, and what does each choice cost me.”

Why the professional corporation is usually the wrong default

Many Utah dental practices are professional corporations because someone assumed the law required it. It does not, and the form carries restrictions the alternatives do not.

Utah Code 16-11-7 limits share issuance and transfer to persons licensed in the same profession, and makes shares issued in violation void. Section 16-11-8 applies the same limit to officers, directors, and shareholders, allowing an unlicensed person only to serve as secretary or treasurer. Section 16-11-13 forces a buyback within 90 days if a shareholder becomes disqualified, unless the governing documents say otherwise. And Section 16-11-9 confirms that a professional corporation may render professional services only through licensed officers, employees, and agents.

None of that is a problem in a practice owned entirely by dentists who intend to keep it that way. It becomes a problem the day a spouse, an investor, a trust, or a management partner should hold equity.

The limited liability company, and what changed on October 1, 2026

For most Utah dental practices the LLC is the natural home. Ownership is unrestricted, the operating agreement can be tailored, and the liability shield is stated plainly.

Utah Code 16-20-304 provides that a debt, obligation, or other liability of a limited liability company is solely that of the company, that a member or manager is not personally liable for it solely by reason of being one, and that the shield applies regardless of dissolution. Subsection (2) adds that failure to observe formalities relating to the exercise of the company’s powers or management of its activities is not a ground for imposing liability on a member or manager.

The important administrative point is that Utah’s LLC act moved. It was Title 48 Chapter 3a. Effective October 1, 2026 it is Title 16 Chapter 20, and the section numbers did not all carry across cleanly. The operating agreement provision that used to be 48-3a-112 is now Section 16-20-107.

If your operating agreement cites Title 48, it is citing a repealed chapter. That does not void the agreement, but it is worth adding a successor-provision savings clause the next time the document is opened, and worth fixing outright in any new agreement.

The S corporation election is a separate decision

An S corporation is a federal tax classification. An LLC can elect it. A corporation can elect it. Choosing an LLC does not choose the tax treatment, and choosing a corporation does not either.

The practical reason dentists consider the election is the treatment of reasonable compensation versus distributions for self-employment tax purposes. That analysis belongs with your accountant, who can run it against your actual numbers, and it should be made with the entity decision rather than after it, because changing course later has costs.

What matters legally is that the election does not change the ownership rules. An LLC that has elected S corporation treatment is still an LLC for purposes of Utah’s Dental Practice Act, and a professional corporation that elects it is still restricted by Title 16 Chapter 11.

What the entity does not do

An entity separates the business from the owner. It does not separate a clinician from their own clinical work.

If you personally treat a patient and are alleged to have done it negligently, the entity does not stand between you and that claim. What the entity protects against is the practice’s contractual and commercial liabilities: the lease, the equipment loan, the vendor invoice, and generally the acts of employees within the scope of employment.

Two things erode even that. A personal guarantee, which lenders and landlords routinely require, puts you back on the hook by contract. And failing to keep practice funds separate from personal funds undermines the separation you formed the entity to create. Utah’s statute forgives formalities, not commingling.

Multiple entities

Once a practice has real assets, the single-entity structure often stops being the right one.

• A separate entity for the real property. If you own the building, holding it apart from the practice and leasing it back separates the two assets and creates a documented rent relationship.
• A separate entity for significant equipment. Sometimes useful, sometimes overengineering. It depends on the financing.
• A holding entity for multiple locations. Worth planning before the second location rather than after.

Every added entity is an added tax return, an added registered agent, and an added set of documents to keep current. Add one when it does something, not because a structure chart looks impressive.

Getting the operating agreement right

The entity form is the easy half. The operating agreement or bylaws are where the practice actually gets governed, and in a multi-owner practice they decide what happens on the worst day.

Section 16-20-107 sets out what an operating agreement may and may not do, including a list of provisions it cannot eliminate, such as the duty of loyalty and care and the obligation of good faith and fair dealing. Within those limits, the terms worth negotiating are decision thresholds, capital call obligations, what happens on death, disability, divorce, or loss of license, how an interest is valued on a buyout, and how a deadlock is broken.

What I see most often

In the dental and orthodontic practices I have worked with, the entity was formed quickly and cheaply at the start, and the operating agreement was whatever came with the filing service. That is fine right up until it is not. The two moments it stops being fine are when a second owner joins and when the practice is sold, and both arrive with the same discovery: the document that governs the most valuable thing the owner has is a template nobody has read since the year it was signed. The entity form is worth thirty minutes. The operating agreement is worth considerably more.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, who can own a dental practice in Utah, and business lawyer.

This article is general information, not legal or tax advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

Who can own a dental practice in Utah is a shorter answer than most dentists expect. Utah does not restrict who may hold the equity in the entity a dentist practices through. It restricts who may control clinical judgment, and it restricts how professional fees may be shared.

Last updated: November 2026

Key Takeaways

The statute that answers the question

Most states approach this through a doctrine called the corporate practice of medicine, extended to dentistry, which bars unlicensed persons from owning a professional practice. Utah’s statute takes a different path, and it is worth reading in full.

“A dentist may engage in the practice of dentistry as: (a) an individual operating as a business proprietor; (b) an employee of another person; (c) a partner in a lawfully organized partnership; (d) a lawfully formed professional corporation; (e) a lawfully organized limited liability company; (f) a lawfully organized business corporation; or (g) any other form of organization recognized by the state which is not prohibited by rule adopted by division rules made in collaboration with the board.”

Utah Code 58-69-804(1)

Two things stand out. The list includes an ordinary limited liability company and an ordinary business corporation, neither of which carries any professional ownership restriction. And the statute regulates the form in which the dentist practices, not the identity of the owners.

That is why an investor, a non-dentist spouse, a holding company, or a dental service organization can hold equity in a Utah dental practice without the friendly professional corporation structures that stricter states require.

The exception you choose for yourself

The ownership restriction that the Dental Practice Act does not impose is imposed by the Professional Corporation Act, and only if you form a professional corporation.

Under Utah Code 16-11-7, a professional corporation may issue shares, and a shareholder may transfer shares, only to persons duly licensed to render the same specific professional services for which the corporation was organized, or to others to the extent the applicable licensing act allows. Subsection (2) states that shares issued in violation of the section are void.

Section 16-11-8 extends the rule to governance. A person may not be an officer, director, or shareholder of a professional corporation unless licensed for those same services or qualified under the applicable licensing act. The one carve-out lets a non-licensed person serve as secretary or treasurer.

And Section 16-11-13 supplies a consequence most owners have never read. If the articles, bylaws, or a private agreement do not address it, the corporation must purchase the shares of a shareholder who fails to qualify or becomes disqualified within 90 days, at reasonable fair value as of the date of disqualification.

What Utah does restrict: control

Ownership is open. Control is not.

Subsection (2) of the form-of-practice section provides that regardless of the form in which a licensee practices, the licensee may not permit another person who is not licensed in Utah as a dentist, and is not otherwise competent to engage in the practice of dentistry, to direct, participate in, or interfere in the licensee’s practice of dentistry.

That standard has been in place for years. What changed recently is where the consequence lives. Utah Code 58-69-501 now lists directing or interfering with a licensed dentist’s judgment and competent practice of dentistry as unlawful conduct. Unlawful conduct is a materially more serious classification than unprofessional conduct, and the provision was added in 2025.

Notice the direction of the duty. Both provisions run to the licensee. The statute tells the dentist not to permit interference. A non-dentist owner who oversteps creates exposure for the dentist, which is why an owner who is not a dentist and a dentist who works for one both need the operating documents to draw the line clearly.

What Utah also restricts: money

The second constraint catches more arrangements than the first, and it is easy to miss because it sits in the unprofessional conduct section rather than anywhere near the ownership rules.

Under Utah Code 58-69-502(1)(a), sharing professional fees with an unlicensed person, or paying any person for sending or referring a patient, is unprofessional conduct.

That reaches further than most owners assume. A management fee calculated as a straight percentage of collections, a marketing agreement priced per new patient produced, and a consultant paid a share of production all deserve review against that sentence. So does a referral arrangement with any non-dentist business, and note that Section 58-69-805 separately requires written disclosure to the patient where a licensee refers to a laboratory or facility in which the licensee or an immediate family member has a financial relationship.

How this plays out in practice

A non-dentist spouse as a co-owner

Permitted in an LLC or a business corporation. Not permitted as a shareholder of a professional corporation, where the shares would be void. This alone is a good reason to think about entity choice before formation rather than after.

An investor or silent partner

Also permitted in an LLC or a business corporation, with the caveat that the operating agreement must not hand the investor decision rights over clinical matters. Rights over budgets, capital, and major transactions are one thing. Rights over treatment planning, materials, and clinical staffing are another.

A dental service organization

Straightforward in Utah as an ownership matter. The work is in the management services agreement, where the fee structure meets the fee splitting rule and the decision rights meet the clinical control rule.

A trust holding the practice interest

Common in estate planning and generally workable with an LLC or business corporation. It is a harder fit with a professional corporation, given the shareholder qualification rules, and it should be coordinated with your estate planning documents rather than done in isolation.

One thing this article does not answer

Section 58-69-804(1)(g) permits any other form of organization recognized by the state that is not prohibited by division rule, which means the licensing division’s administrative rules can add requirements the statutes do not contain. The statutory picture above is accurate, and it is not necessarily the complete picture for a specific structure. Check the current division rules before relying on an unusual arrangement.

What I see most often

In the dental and orthodontic matters I have handled, the professional corporation is chosen by default, usually years earlier, by someone who assumed it was required. It rarely is, and the choice quietly forecloses options later: a spouse cannot hold equity, an investor cannot come in, and a trust is awkward. Nobody notices until the owner wants to do one of those things, at which point converting the entity is a project rather than a decision. The time to think about who can own a dental practice is at formation, when it costs nothing.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah and business lawyer.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

Selling a dental practice to a DSO is not a simpler version of selling to another dentist. The headline number usually includes equity you cannot spend, an employment term you must serve, and a management agreement that governs your working life for years after closing.

Last updated: November 2026

Key Takeaways

What selling a dental practice to a DSO actually involves

A dental service organization transaction is usually three or four documents that only make sense read together.

Sellers commonly negotiate hard on the first and skim the other three. The first sets the number. The other three determine whether you receive it and what your life looks like while you wait.

Utah makes selling a dental practice to a DSO structurally easy, then draws one hard line

In some states a DSO must use an elaborate structure because a non-dentist cannot own a practice. Utah is not one of those states.

Utah Code 58-69-804(1) permits a dentist to practice through a professional corporation, a limited liability company, or an ordinary business corporation, and says nothing about who may hold the equity. That is why DSO transactions in Utah look more like ordinary business acquisitions than they do in stricter jurisdictions.

The line Utah does draw is about control and money.

Subsection (2) of the same section prohibits a licensee from permitting an unlicensed person to direct, participate in, or interfere in the licensee’s practice of dentistry. Utah Code 58-69-501 now lists directing or interfering with a licensed dentist’s judgment and competent practice of dentistry as unlawful conduct, which is a more serious category than unprofessional conduct.

And Utah Code 58-69-502 makes sharing professional fees with an unlicensed person, or paying any person for sending or referring a patient, unprofessional conduct. A management fee expressed as a straight percentage of collections deserves careful review against that sentence, and so does any marketing arrangement priced per new patient.

Both of those constraints run to you, the licensee, not to the DSO. That is the asymmetry worth understanding before signing.

Rollover equity is the part that decides the outcome

Most offers for selling a dental practice to a DSO include a portion of the price paid in equity of the acquiring platform rather than cash. It is often presented as the upside: a second bite when the platform sells again.

The questions that determine whether that upside is real:

• What entity are you receiving equity in, and where does it sit relative to the operating company and the debt?
• Is it common equity, preferred, or profits interests, and what gets paid first in a sale?
• Can you be diluted by later acquisitions or capital raises, and is there any protection?
• Are there drag-along rights that force you to sell on terms you did not negotiate?
• What happens to the equity if you leave, are terminated, or become disabled before a liquidity event?
• Is there any information right, so you can see how the platform is performing?
• Is there a put right or any path to liquidity if a second sale never happens?

An answer of “there is no put right and no information right” is not necessarily a reason to walk away. It is a reason to value the equity differently from cash, and to negotiate the cash portion accordingly.

The employment agreement you sign at closing

You are selling a business and taking a job in the same transaction, and the two are usually linked so that leaving early costs you money.

Read the compensation formula carefully. A percentage of collections sounds simple until you see what is deducted before the percentage is applied: lab, supplies, an allocation of overhead, a management fee, or adjustments for write-offs you do not control. Ask for a worked example using the practice’s actual numbers from last year, and compare it to what you earned.

Then read the term and the exit. What is the stated length, what happens to unpaid deferred consideration or equity if you leave before it ends, and what are the grounds for termination by the company. A definition of cause broad enough to include failure to meet production targets is a different arrangement from one limited to misconduct.

Which restrictions actually bind you

This is where Utah’s 2026 change matters.

Utah Code 34-51-201(1)(b) voids healthcare non-compete agreements entered into on or after May 6, 2026, and Section 34-51-102(5)(a)(xii) includes dentists. But Section 34-51-202(1)(b) preserves a covenant related to or arising out of the sale of a business where the restricted individual receives value related to the sale.

As a selling dentist you are receiving sale value, so a covenant tied to the sale is likely enforceable against you. A covenant sitting only in your post-closing employment agreement is on much weaker ground. Which document a restriction appears in is therefore not a formality, and a buyer’s counsel will know exactly where to put it.

One more provision worth knowing: Section 34-51-203 voids any nonsolicitation term that would stop a dentist from telling patients where they currently work or where they are going next.

Questions to ask before signing a DSO letter of intent

• What is the cash at closing, and what is deferred, contingent, or in equity?
• How is the management fee calculated, and what does it cover?
• Who decides staffing, hours, fee schedules, materials, and lab selection?
• What clinical decisions remain entirely mine, in writing?
• What happens to my equity if I leave in year two?
• How many practices has the platform acquired, and what happened to the sellers?
• Which restrictions sit in the purchase agreement and which sit in the employment agreement?

Specialty notes

Orthodontics. Platforms value contracts in progress differently, and it is a common source of post-closing adjustment disputes. Pin down the treatment of prepaid cases in the letter of intent.

Pediatric dentistry. Where public payers are a large share of collections, the platform will diligence audit history closely and re-enrollment can affect the closing timetable.

Periodontics and oral surgery. Anesthesia permits are personal to the clinician under Utah Code 58-69-301, which gives a surgical seller more leverage than a general dentist has, because the platform cannot simply replace you.

What I see most often

In the transactions I have handled, the seller has read the purchase agreement closely and the other three documents quickly, and the disappointment arrives later from one of those three rather than from the price. The most common version is a compensation formula that looked like the seller’s historical earnings until the deductions applied, discovered in the first full quarter after closing when the leverage is gone. The second most common is equity that turns out to sit behind a layer of preferred capital nobody explained. Both are visible in the documents before signing, and both are negotiable while the platform still wants the practice.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, selling a dental practice in Utah, and dental practice valuation.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of November 2026.

A dental practice valuation is an accounting exercise built on legal foundations. The appraiser prices earnings and assets, but the terms of your lease, your covenants, your entity documents, and your payer contracts decide how much of that value a buyer can actually acquire and finance.

Last updated: October 2026

Key Takeaways

What a dental practice valuation is measuring

An appraiser is generally answering one question in three different ways: what would a willing buyer pay a willing seller, neither being compelled, both reasonably informed.

The common approaches are an income approach that capitalizes normalized earnings, a market approach that compares completed transactions, and an asset approach that values the tangible property and adds intangible value. Most dental practice valuations lean on the first two, and the hardest input is normalization: deciding which of the owner’s expenses are really business expenses and what the practice would earn under a different owner.

None of that is legal work. What is legal work is everything that determines whether the value an appraiser identifies is actually deliverable to a buyer.

The legal terms that move the number

Why the associate rule changed the risk picture

Before 2026, a practice with several producing associates could point to signed covenants as a reason to believe that production would stay. That argument is gone.

Utah Code 34-51-201(1)(b) voids healthcare non-compete agreements entered into on or after May 6, 2026, and Section 34-51-102(5)(a)(xii) puts dentists inside that definition. Section 34-51-203 also voids nonsolicitation terms that stop a departing dentist from telling patients where they are going.

This does not necessarily reduce a practice’s value. It changes what supports the value. Retention now rests on compensation, ownership opportunity, and culture rather than on a clause, and a seller who can show a credible retention structure is presenting a different asset from one who cannot.

Note the asymmetry that survives. The seller’s own covenant remains enforceable under Section 34-51-202(1)(b) because the seller receives value related to the sale. Goodwill is still protectable against the person selling it.

Goodwill, and the difference between two kinds

Appraisers commonly distinguish practice goodwill, which attaches to the location, the systems, the staff, and the patient base, from personal goodwill, which attaches to the individual clinician.

The distinction matters legally as well as in the appraisal. Practice goodwill is what a buyer is acquiring. Personal goodwill is what the covenant and the transition period are designed to convert into something transferable. A solo practice where patients came for one dentist by name has more personal goodwill and needs a longer transition and a firmer covenant. A practice with several clinicians, strong hygiene, and systems that run without the owner has more practice goodwill and transfers more easily.

Valuation for purposes other than a sale

A dental practice valuation gets used for more than an exit, and the purpose changes what the number is for.

• A partner buy-in or buyout. The buy-sell agreement should state the valuation method in advance rather than leaving it to be argued about when someone wants out.
• Divorce. A practice interest is typically a marital asset, and the treatment of personal goodwill is contested territory.
• Estate planning and succession. Value drives gifting decisions, insurance amounts, and whether a buy-sell is adequately funded.
• Lending. A lender’s own view of value constrains what a buyer can borrow, which constrains the price.
• Litigation. Where value is disputed, the credibility of the method matters as much as the result.

The most common failure in this list is the buy-sell agreement that says the price is fair market value as agreed by the parties, with no method and no tie-breaker. That sentence guarantees a fight at the worst possible moment.

Specialty notes

Orthodontics. Contracts in progress reduce the value a buyer can pay, because part of the revenue was collected before closing and the chair time is still owed. Expect an explicit adjustment.

Pediatric dentistry. Payer mix drives earnings quality. Where a large share of collections comes from public programs, audit history and re-enrollment timing affect both value and financeability.

Periodontics and oral surgery. Equipment intensity is higher, the buyer pool is smaller because the buyer must hold the relevant permits under Utah Code 58-69-301, and tail coverage is a larger line item at closing.

What I see most often

In the dental and orthodontic matters I have handled, the valuation is rarely what parties actually disagree about. They disagree about terms that determine whether the valued asset can be delivered. A number can be entirely defensible while the practice is difficult to sell, because the lease has two years left, or a co-owner’s interest was never documented, or a third of production belongs to an associate nobody has spoken to about the sale. The appraisal answers what it is worth. The documents answer whether anyone can buy it.

Common mistakes

• Treating the appraisal as the end of the analysis rather than the beginning.
• A buy-sell agreement with no stated valuation method.
• Getting a valuation only after a buyer has made an offer.
• Ignoring a short lease term because the appraisal did not mention it.
• Assuming associate-driven production carries the same risk as owner-driven or hygiene-driven production.
• Running personal expenses through the practice and then asking a buyer to accept an adjusted earnings figure on faith.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, selling a dental practice in Utah, and business succession law.

This article is general information, not legal advice and not a valuation opinion. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of October 2026.

Selling a dental practice in Utah is mostly a tax and structure question wearing a clinical costume. What you net depends on how the price is allocated, how the covenant is drafted, whether the lease can be assigned, and how long you agree to stay. The clinical part is the easy part.

Last updated: October 2026

Key Takeaways

Preparing to sell, ideally a year out

Almost everything that reduces a sale price is fixable if you start early enough and unfixable once a buyer is in diligence. The work worth doing in advance:

• The lease. Extend or add options if the remaining term is short. A buyer financing a purchase needs a lease term that outlasts the loan.
• Equipment liens. Pay off or document what is financed so payoff letters and UCC terminations are routine at closing.
• The entity. Confirm the operating agreement or bylaws are current, that any co-owner is documented, and that a buy-sell agreement exists if there is a partner.
• Employment paperwork. Written agreements, current classifications, and clean wage records survive diligence better than handshakes.
• Any management, marketing, or consulting arrangement that takes a share of collections, which needs to be tested against the fee splitting rule before a buyer’s counsel finds it.
• The books. Personal expenses run through the practice depress the reported earnings a buyer will pay a multiple of.

Deal structure and what it does to your proceeds

Most dental transitions are asset sales. The buyer forms an entity, buys the assets, and leaves your entity holding its own history. That is generally better for the buyer and often acceptable to the seller, but it puts the allocation question front and center.

Under 26 U.S.C. 1060 the price is allocated among asset classes by the residual method and reported by both parties on Form 8594. Equipment, supplies, goodwill, the covenant, and any consulting or transition payments are treated differently, and the difference between a well-negotiated allocation and a careless one is real money to a seller.

Two allocations deserve particular attention when selling a dental practice. Value assigned to your covenant not to compete and value assigned to post-closing consulting or employment are treated differently from goodwill, and a buyer with good advisors will push value toward the categories that help the buyer. Bring your accountant into the negotiation while terms are still open.

Your covenant is enforceable. Your associates’ covenants are not.

Utah changed this in 2026 and it affects what a buyer will pay.

Utah Code 34-51-201(1)(b) makes a healthcare non-compete agreement entered into on or after May 6, 2026 void, and Section 34-51-102(5)(a)(xii) lists a dentist as a healthcare worker. Section 34-51-203 separately voids any nonsolicitation clause that stops a departing dentist from telling patients where they are going.

The sale-of-business exception in Section 34-51-202(1)(b) preserves a covenant related to or arising out of a sale where the restricted individual receives value related to the sale. You are that person. Your associate dentists, who receive no sale proceeds, generally are not.

Expect a sophisticated buyer to ask what share of production comes from associates and what happens if they leave. A seller who can answer that question with a retention plan already in place is in a stronger position than one who discovers it during diligence.

What a buyer will scrutinize

The transition period

Most buyers want the selling dentist to stay for a defined stretch so patients transfer rather than scatter. That arrangement should be its own document, separate from the purchase agreement, with a stated term, a defined schedule, clear compensation, and a way for either party to end it.

Two points are worth negotiating rather than accepting. The first is what happens if production falls during the transition, because a buyer sometimes wants a clawback and a seller rarely should agree to an open-ended one. The second is whether you remain an employee or an independent contractor, which affects taxes, benefits, and the malpractice coverage that applies.

Records, retention, and your exposure after closing

Selling the practice does not end your relationship with the charts. A board inquiry, a claim, or a records request can arrive years later and will be directed at the treatment you provided.

Negotiate for continued access to records for a defined period, and require the buyer to preserve them for at least as long as any applicable retention obligation. Keep your own copies of anything you may need to defend yourself. Because the records contain protected health information, the arrangement has to work within 45 CFR Part 164.

Also settle who pays for tail coverage on your malpractice policy. In periodontics and oral surgery in particular, that is not a small number, and it is a negotiable item rather than an assumption.

Specialty notes

Orthodontics. Contracts in progress will be the loudest issue in the negotiation. Expect the buyer to want a holdback against the treatment you have already been paid for.

Pediatric dentistry. Public payer participation makes audit history and re-enrollment timing central. Assemble that record before a buyer asks.

Periodontics and oral surgery. Anesthesia permits do not transfer, tail coverage costs more, and the buyer will want to know whether a clinician capable of maintaining the surgical side is staying.

What I see most often

In the practice sales I have handled, sellers arrive with the clinical side impeccable and the paperwork improvised. The lease has two years left. The associate has a handshake. Personal expenses run through the practice and depress the earnings figure the buyer is applying a multiple to. None of that is unusual and none of it is fatal, but every item is worth more when it is fixed a year ahead than when it is discovered in diligence, because in diligence each one becomes a reason to reprice rather than a thing to be solved.

Common mistakes

• Listing before addressing a short lease term.
• Accepting an allocation without running the tax math first.
• Letting the covenant be drafted into a transition employment agreement instead of the sale.
• Assuming the associates transfer with the practice.
• Agreeing to an open-ended production clawback during the transition.
• Saying nothing about post-closing access to records.
• Leaving tail coverage unaddressed until closing week.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, dental practice purchase agreements, and business succession law.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of October 2026.

A dental practice purchase agreement does four jobs: it fixes the price and how it is allocated, it lists exactly which assets transfer, it allocates the liabilities nobody has found yet, and it states what each side promised was true. Most disputes after closing trace back to a gap in one of those four.

Last updated: October 2026

Key Takeaways

What a dental practice purchase agreement has to cover

The structure of the document is fairly standard. What varies, and what is worth your attention, is how specific each section is.

Purchase price allocation

Buyer and seller are adverse here, and both sides know it. The buyer wants weight in assets that can be depreciated or amortized quickly. The seller generally wants weight in goodwill. The agreement should state the allocation, and both parties then report consistently.

Federal law pushes in the same direction. Under 26 U.S.C. 1060, an applicable asset acquisition requires the purchase price to be allocated among asset classes under the residual method, and the parties report the allocation to the IRS on Form 8594. Two inconsistent forms filed by two parties to the same transaction is an easy thing for the IRS to notice.

Get your accountant into this conversation while the agreement is still in draft. The allocation is a negotiated term with a dollar value, not a compliance formality.

The seller’s covenant not to compete

This clause carries more weight in Utah than it used to, because it is now the only restrictive covenant in a dental transaction that reliably survives.

Utah Code 34-51-201(1)(b) voids healthcare non-compete agreements entered into on or after May 6, 2026, and Section 34-51-102(5)(a)(xii) makes a dentist a healthcare worker. The exception is Section 34-51-202(1)(b), which permits a covenant related to or arising out of the sale of a business where the restricted individual receives value related to the sale.

Two drafting consequences follow. First, the covenant should sit in the dental practice purchase agreement and be visibly tied to the consideration, not tucked into a separate employment agreement for the seller’s transition period. Second, the scope should be defensible on its own terms. A radius drawn around the office that reflects where patients actually come from is easier to defend than a county-wide restriction copied from a form.

If the seller is also staying on as an employee, keep the two documents distinct. The covenant belongs to the sale.

Patient records deserve their own section

Records are simultaneously a clinical obligation, a privacy obligation, and an asset with real value, and a one-line transfer clause handles none of that.

The section should address who holds the records after closing, how long they are retained, what notice patients receive about the transition, how the seller gets access if a claim or a board inquiry arrives later, and what happens if the buyer later sells or closes the practice. It should also allocate responsibility for responding to record requests during the retention period.

Because the buyer will be handling protected health information, the transfer also has to be consistent with the HIPAA privacy and security rules at 45 CFR Part 164. A records section written with that in mind is short. A records section written without it tends to be missing.

Work in progress and prepaid treatment

A patient who paid in full for an orthodontic case in month three of a twenty-four month treatment has bought chair time the buyer will provide and the seller already collected.

Handle it explicitly. Quantify the outstanding obligation, decide who bears it, and if the buyer bears it, reduce the price or hold back a portion until the obligation is worked off. The same logic applies to prepaid implant cases, prepaid membership plans, and any in-house discount plan the practice sells.

Representations, survival, and remedies

Buyers spend most of their negotiating energy on the list of representations and almost none on how long those representations last. The list is close to worthless without a survival period.

Three terms decide whether the promises mean anything: how long each representation survives closing, whether there is an indemnity obligation and what it is capped at, and whether any part of the price is held back or escrowed to satisfy a claim. A seller’s promise that survives for zero days after closing is a sentence, not a protection.

The representations worth insisting on in a dental deal include licensure and disciplinary history, absence of undisclosed payer audits or recoupment demands, accuracy of the production and collections reports, clear title to the equipment, compliance with employment obligations, and no undisclosed management or marketing arrangements that take a share of collections.

Closing conditions that reflect dental reality

A dental practice purchase agreement should be conditioned on the things that actually stop these deals:

• Landlord consent to assignment of the lease, on terms acceptable to the buyer.
• Delivery of payoff letters and UCC termination statements for financed equipment.
• Lender funding, with a defined outside date.
• Seller’s licensure in good standing at closing.
• Where credentialing is essential to cash flow, either evidence of enrollment or an agreed structure for the gap.

What I see most often

In the dental and orthodontic transactions I have handled, the two sections that get the least attention are the two that generate the most trouble afterward. Purchase price allocation is left to be sorted out later, and the parties discover the following spring that they took inconsistent positions on the same dollars. Patient records get a single sentence, and then a records request or a board inquiry arrives two years later addressed to a seller who no longer has access to the chart. Neither problem is hard to prevent. Both are nearly impossible to fix after closing, because the leverage is gone the moment the money moves.

Common mistakes

• Accepting the broker’s form and assuming it is neutral.
• Leaving the allocation blank or agreeing to “as determined by the parties’ accountants.”
• Putting the seller’s covenant in an employment agreement instead of the purchase agreement.
• Omitting a survival period for representations.
• Ignoring work in progress in a specialty practice.
• Failing to condition closing on landlord consent.
• Saying nothing about the phone number, domain, and online review profiles, which is much of what a patient base actually follows.

Written by Jeremy Eveland, a Utah business attorney who represents dental and orthodontic practice owners in transactions, employment agreements, leases, entity structure, and succession planning. Related reading: dental practice lawyer in Utah, buying a dental practice in Utah, and purchase and sale agreements.

This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the provisions described here were current as of October 2026.