Dental Corporation Legal Checklist

nat rosasco • November 14, 2017

When preparing to organize your dental practice, choosing the form of business entity may seem daunting. Dentists have many options for organizing their practices. In Illinois, these options include a limited liability partnership, professional association, professional limited liability company or a professional service corporation (“PSC”). Often, the best option for solo practitioner dentists is to form a PSC as it can provide tax advantages, liability protection and other benefits that are beyond the scope of this article. While a PSC operates similarly to a traditional corporation, because of its unique nature the set-up and maintenance of a PSC is a bit more nuanced than that of the traditional corporation. This article will provide you with a general overview and basic legal compliance checklist of the PSC incorporation requirements for dentists, but may also be applicable to other healthcare professionals.


Pre-Incorporation

1)  Choose Your Company’s Personnel. Traditional corporations are not generally limited in who can participate in its ownership and operation. However, under the Professional Services Corporation Act (the “PSC Act”), a PSC is limited in who is allowed to participate in the company. All shareholders, directors, officers, agents and employees of the PSC must be duly licensed by the Illinois Department of Financial and Professional Regulation (“IDFPR”) to provide their respective dental services. Only “ancillary personnel” do not require licensure.


Ancillary personnel, which typically includes clerks, administrative staff and technicians, are employees who:

a)  Are not licensed under the Illinois Dental Practice Act (“Dental Act”);

b)  Are supervised by persons licensed under the Dental Act;

c)  Do not hold themselves out to be licensed under the Dental Act; and

d)  Are not prohibited by the IDFPR from being employed by the PSC. 

2)  Choose Your Company’s Name. Choosing your company’s name is vital to your PSC as it is often the first impression that people have of your company. The PSC Act has two main requirements when choosing your company’s legal name. The name must:

a)  Include the full name or last name of one or more of the shareholders; and

b)  End with “chartered”, “Limited”, “Ltd.”, “Professional Corporation”, “Prof. Corp.” or “P.C.”

However, if you would like to operate your company under a different name, your PSC can adopt a fictitious name by making a filing with the county clerk of the county where your company’s principal office is located.

3)  Choose Your Company’s Location. The PSC Act and Dental Act require that your company’s principal address be located in Illinois. Additionally, the PSC Act requires you to submit a separate application for licensure from IDFPR for each business location in Illinois.


Incorporation

1)  Draft Your Corporate Documents. To ensure that your PSC is in full corporate compliance, you will need to draft articles of incorporation, bylaws and other necessary documents for your company. In having these documents prepared, please note that it is important to use attorneys experienced in setting up PSCs to best protect your company from increased and unnecessary liability.

2)  File Articles of Incorporation with the Illinois Secretary of State. Once you have compiled all of the necessary corporate documents, you will need to file the Articles of Incorporation with the Secretary of State. Articles of Incorporation can be filed in-person, via mail or on the Secretary of State website.

3)  Obtain Your Federal Employer Identification Number. You can obtain a Federal Employer Identification Number or EIN, from the IRS via telephone or the IRS website.

4)  Register with the IDFPR. The final step in setting up your PSC before your company can begin practicing dentistry in Illinois is obtaining a license for your PSC from the IDFPR. The license application can be filled out online via the IDFPR website.


Post-Incorporation

Once you organize a PSC, it is imperative to properly maintain the “corporate veil”, or the invisible wall separating you from your PSC. If the corporate veil is not maintained, the limited liability benefits you are afforded under your PSC can be destroyed and you may be held personally liable for the liabilities of your PSC (note however, that a PSC does not provide insulation from dental malpractice, for which a dentist remains personally liable). In order to maintain your PSC’s corporate veil, you must:

1)  Timely file the PSC’s Annual Reports.

2)  Timely renew the PSC’s license with IDFPR.

3)  Properly maintain separate corporate minutes, records and consents for the PSC.

4)  Do not commingle PSC funds and personal funds.

5)  Only sign documents in the operation of your PSC in your capacity as an officer, director or shareholder of the company.


Please note that the foregoing list is not necessarily exhaustive but it is the minimum you need to do to maintain your PSC.

That concludes the general overview and basic legal compliance checklist for forming a PSC in Illinois. It is important to remember that while a PSC may be the correct choice for certain dentists, it may not be the best choice for you. Accordingly, regardless of how you choose to organize your dental practice, it is important to consult with an experienced attorney beforehand to determine which type of entity best suits your specific needs. Please feel free to reach out to me with any questions at bhaney@ghulaw.com or visit our website at www.chicagodentalattorney.com. 

 

Robert Haney is an attorney and business advisor serving businesses in the Chicagoland area and throughout the country. Mr. Haney advises businesses and entrepreneurs from startup to sale, and strives to be a trusted advisor to his clients by delivering practical and efficient counsel on a wide range of matters. His combination of legal and business experience provides a unique perspective when counseling clients, giving him an understanding of the true value and application of his advice to their organizations. To learn more about Mr. Haney, visit www.ghulaw.com.

Employers Can Require COVID-19 Vaccinations For Most Employees

By nat rosasco • February 25, 2021
As this relentlessly awful year mercifully draws to a close, a light at the end of our pandemic tunnel is rapidly approaching. COVID-19 vaccines are poised for approval, and it is expected that distribution will begin in earnest shortly. But no matter how much and how confidently the FDA and other health experts proclaim these vaccines to be safe and effective, there are large numbers of Americans who say they won’t get the shot when it becomes available. The most recent Gallup poll found that only 63 percent of Americans say they are willing to be inoculated against the disease. Many of those who don’t want to get vaccinated will soon find out that they work for an employer who feels differently. Those employers may also tell them that they either need to get the vaccine or need to find a new job. And, in most cases, employers may be well within their rights to terminate employees who refuse to take the COVID-19 vaccine. Mandatory Vaccinations Are Not New Companies that have spent the better part of the year – and lots of money - trying to keep their workplaces COVID-free see the vaccine as the apex of those efforts. With a fully vaccinated workforce, business owners can operate without disruption and provide employees, customers, clients, and patients with confidence and peace of mind. But all of those benefits of the vaccine only accrue to fully vaccinated workforces. So, many companies may mandate that employees get their shot as a condition of continued employment. By doing so, they are following a legally sound path that predates the current pandemic. Well before anyone had heard of coronavirus, plenty of employers, primarily in the health care sector, required employees to get the flu vaccine and vaccinations against other infectious diseases. Most public school districts also require proof of vaccinations before a student can enroll and attend classes. Since most employees in Illinois work on an “at-will” basis, they can face termination for almost any reason not expressly prohibited by federal, state, or local laws. Generally, no law stands in the way of an employer requiring the COVID-19 vaccine for its workers. ADA and Religious Exceptions However, employers who make vaccines mandatory need to be mindful that employees with legitimate health or religious concerns about the vaccine may be protected from termination and other adverse employment actions if they refuse the shot. But these exceptions don’t necessarily apply just because someone doesn’t believe in vaccines generally (“anti-vaxers”) or thinks that forcing them to get vaccination is an infringement on their liberties. Employees who have a disability recognized under the Americans with Disabilities Act (ADA) that prevents them from taking the coronavirus vaccine cannot be forced to get the vaccine, so long as their exemption does not impose an “undue hardship” on the employer. Such disabilities in this context may include a compromised immune system or an allergy to an ingredient in the vaccine. While there has been no definitive guidance on the subject, one could credibly argue that an employee’s refusal to get vaccinated is an “undue hardship” if it places the health and safety of other employees and visitors at increase risk of infection. Even in such cases, however, an employer may need to make a “reasonable accommodation” for the employee, such as allowing them to work from home. Similarly, the anti-discrimination provisions of Title VII of the Civil Rights Act of 1964 may protect a worker if their “sincerely-held religious beliefs” preclude them from getting a vaccination. Such beliefs do not include political or personal views. The burden is on the employee to demonstrate the legitimacy of their religious objections to the vaccine. More Than Legal Issues To Consider Even when an employer is within their legal rights to require employees to get the COVID-19 vaccine, other considerations may weigh against such a mandate. For example, they may need protection against an employee who has an adverse reaction, even if they signed a waiver upon receiving the shot. A vaccination requirement may also get an adverse reaction from employees generally as well as the general public if it seems heavy-handed and overreaching. Of course, those that decide against a mandate face risks if someone does contract the coronavirus in the workplace and sues. Please Contact Grogan Hesse & Uditsky With All Of Your COVID-Related Employment Questions If you have questions or concerns about how to handle vaccinations or other employment issues related to COVID-19, please call us at (630) 833-5533 or contact us online to arrange for a consultation.

Are You Eligible for the Second Round of PPP Loan Forgiveness?

By nat rosasco • January 11, 2021
The Paycheck Protection Program (PPP) is back , offering a second round of loan forgiveness to new borrowers and qualified second-time PPP borrowers. The second round of PPP loans has earmarked up to $284 billion to support business owners' payroll costs and other eligible expenses through March 31, 2021. Loans will be available to first-time participants on Monday, January 11, and existing PPP participants on Wednesday, January 13. First Draw PPP Loan Eligibility Borrowers that did not participate in the first round are generally eligible for a First Draw PPP Loan if they were in operation on February 15, 2020, and fall into one of the following categories: Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans. Eligible self-employed individuals (including sole proprietors and independent contractors). Non-profit organizations, including churches. Accommodation and food services operations with no more than 500 employees per location. Sec. 501(c)(6) business leagues with no more than 300 employees that do not receive more than 15% of its income from lobbying. Qualifying news organizations with 500 or fewer employees per location. Second Draw PPP Loan Eligibility Existing PPP participants are generally eligible for a Second Draw PPP Loan if the borrower: Used or will have used its First Draw PPP Loan as authorized. Has no more than 300 employees. Can prove it has suffered at least a 25% reduction in gross income between the same quarters in 2019 and 2020. Our team is committed to monitoring new developments with the PPP and providing you with the information you need. It is essential that your small business consults with knowledgeable corporate attorneys , financial advisors, and accountants on your PPP eligibility and forgiveness applications. If you have any questions about the new eligibility requirements or any other issues involving the PPP, please feel free to call or email us.

Amendments to PPP Loan Forgiveness

By nat rosasco • June 5, 2020
Many businesses that received Paycheck Protection Program (“PPP”) funds are coming to the end of their respective eight-week time periods (“Expenditure Period”) during which they must use the PPP funds to obtain forgiveness under the CARES Act. Unfortunately, many of these businesses have found it difficult to reopen and remain fully operational throughout the Expenditure Period and consequently to meet spending thresholds necessary to obtain full forgiveness. Luckily for these businesses, some much needed flexibility is on its way. Paycheck Protection Program Flexibility Act On June 5th, the Paycheck Protection Program Flexibility Act (“PPPFA”) was signed into law. The PPPFA made the following changes relevant to PPP loan forgiveness: Extends the Expenditure Period from eight weeks to the earlier of twenty-four weeks from the date of the loan origination or December 31, 2020. Reduces the required payroll spending amount to a minimum of 60% on payroll instead of the current 75% minimum requirement. This would allow businesses to use the remaining 40% of the PPP funds on rent and other operational items as needed. Extends the deadline for workers to be able to be rehired to December 31, 2020 instead of the current cutoff of June 30, 2020. Extends the PPP loan to a five-year term instead of the current two-year term. As any amendments governing the use and repayment of PPP loans may be vital to a small business’ ability to continue to operate and successfully plan for the future, our team will continue to keep you up to date on the on-going developments. As always, it is important to consult with informed attorneys, financial advisors, bankers and accountants on how best to use your PPP funds. Should you have any questions, don’t hesitate to call or email us.
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