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Dental Tribune Middle East & Africa Edition

M ost dentists are not primarily business people, so it’s not sur- prising that since the General Dental Council (GDC) altered the regulations to allow dental practices to operate as limited companies from 2006, there has been much speculation and misinformation circulating within the profession about whether to take this step. Limited Liability The use of the word ‘limited’ in the title ‘limited company’ refers to limited liability. While even in these parlous times, few dental practices are in danger of clos- ing, the shareholders in a limit- ed company have the security of knowing that their exposure to liabilities to creditors will nev- er exceed their original share capital, usually between £100 and £1,000. Another advantage of trad- ing as a limited company is the higher level of credibility in many commercial negotiations or inter-business relations ac- corded to a company compared with a sole trader. Selling to a third party It is often easier to transfer the ownership of a practice trading as a limited company. This is be- cause the company remains in existence unless it is dissolved or liquidated. The existing business ar- rangements, bank accounts and supply contracts, for exam- ple, all stay the same under the new ownership, while the new owner of a sole-trader practice would need to re-establish these relationships under his/her own name. This is especially impor- tant with PCT contracts, which should be unaffected, provided the PCT has been properly ap- proached at the time of incorpo- ration and the PCT contract has been transferred into the limited company without restriction. Experience shows that incorpo- rated practices with PCT con- tracts are realising higher sell- ing values than unincorporated practices, partly for this reason. The process of incorporation and the resulting altered tax re- gime enables converting sole traders to use tax savings aris- ing from incorporation to sub- stantially increase their pension contributions without affecting their current quality of life, sub- ject to the new rules on pension contributions for high earners. Tax benefits Other taxation benefits, related to the differences between how individuals and companies pay tax and National Insurance, de- pend on the individual’s income, which is effectively the prac- tice’s profit in any given year. Limiting your affairs Michael Lansdell outlines the advantages of incorporation for an independent practice owned and operated by a dentist or partnership ‘Shareholders in a limited company have the security of knowing that their exposure to liabili- ties to creditors will never exceed their original share capital’ Business Matters DENTALTRIBUNE Middle East & Africa Edition8 Nena Puga Tel.: +1 310 696 9025 E-mail: nena@gidedental.com website: www.gidedental.com Contact in Athens: Lito Christophilopoulou +30 210 213 2084, +30 210 222 2637 E-mail: lito@omnipress.gr, omnipress@omnipress.gr Web:www.omnicongresses.gr Register & More Information at: Contact in the US: SPONSORS coltene whalledent Media Partner: AD