Whether Dentists May Form a Corporation to Primarily Practice Dentistry

DOJ OPINION NO. 39, s. 2020 August 31, 2020 Dr. Melinda L. Garcia Officer-in-Charge Professional Regulatory Board of Dentistry Professional Regulation Commission PRC Building, Paredes St. Sampaloc, Manila Dear Dr. Garcia : This has reference to your letter requesting for this Department's opinion on whether dentists are allowed to form a corporation in the Philippines, the primary purpose of which is to practice the profession of dentistry. You stated that there is no provision in Republic Act (RA) No. 9484 or the Philippine Dental Act of 2007 that directly prohibits dentists from forming a corporation to carry out their dental practice and that it is also silent on whether dentists may practice their profession through a corporation. Further, it was stated in your letter that there is no direct prohibition in the Code of Ethics for Dentists, Dental Hygienists, and Dental Technologists which proscribes dentists from forming a corporation to carry out their dental practice. Finally, you also mentioned that the Board is not aware of any law that prohibits corporations from hiring dentists or engaging the services of dentists in connection with the practice of the corporation's business. You argued that "just because a corporation has dentists as a shareholder, director or officer, does not mean that the corporation is engaged in the practice of dentistry." We note that the last observation that you stated refers to a situation where a corporation hires dentists or engages the services of dentists in connection with the practice of the corporation's business, which may be for any purpose, and thus, is not reflective of your query on whether dentists are allowed to form a corporation whose primary purpose is to practice the profession of dentistry. Section 10 of R.A. No. 11232 or the Revised Corporation Code of the Philippines provides: Title II INCORPORATION AND ORGANIZATION OF PRIVATE CORPORATIONS Section 10 . Number and Qualifications of Incorporators . Any person, partnership, association or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation for any lawful purpose or purposes: Provided , That natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation unless otherwise provided under special laws . Incorporators who are natural persons must be of legal age. Each incorporator of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock. A corporation with a single stockholder is considered a One Person Corporation as described in Title XIII, Chapter III of this Code. The foregoing is consistent with Article XII, Section 14 of the 1987 Constitution, which states: x x x. The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law. Thus, persons who are allowed to practice a profession, dentists included, are not allowed to organize as a corporation for the primary purpose of practicing a profession, unless categorically allowed and provided under special laws. A careful perusal of both the Philippine Dental Act of 2007 1 and the Board of Dentistry Resolution No. 12, Series of 2007 2 shows no provision allowing dentists to organize as a corporation for the purpose of practicing their profession. Absent such provision, dentists cannot organize as a corporation for the purpose of practicing their profession. CAIHTE Furthermore, under the Annex on Professions of the Eleventh Regular Foreign Investment Negative List 3 of the Foreign Investments Act, corporate practice is allowed only in the following professions (which does not include Dentistry), subject to the requirements and conditions under the pertinent professional regulatory law, to wit: (1) Aeronautical engineering (Section 28, PD 1570); (2) Agricultural and biosystems engineering (Section 29, RA No. 10915); (3) Architecture (Section 37, RA No. 9266); (4) Chemistry (Section 35, RA No. 10657); (5) Electronics engineering (Section 28, RA No. 9292); (6) Environmental planning (Section 25, RA No. 10587); (7) Forestry (Section 25, RA No. 10690); (8) Guidance and counselling (Section 27, RA No. 9258); (9) Interior design (Section 26, RA 10350); (10) Landscape architecture (Section 26, RA No. 9053); (11) Naval architecture (Section 30 [g], RA 10698); (12) Psychology (Section 33, RA No. 10029); (13) Real estate service (real estate consultant, real estate, appraiser, real estate assessor, real estate broker and real estate salesperson) (Section 32, RA 9646); (14) Sanitary engineering (Section 30, RA No. 1364); and (15) Social work (Section 1 [c], RA No. 4373, as amended). Nevertheless, dentists may form a general professional partnership under Article 1767 of the New Civil Code provides: Article 1767 . By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Two or more persons may also form a partnership for the exercise of a profession. (emphasis supplied) Therefore, dentists are prohibited from forming a corporation organized for the purpose of practicing their profession, but may form general professional partnerships for such purpose. Please be guided accordingly. Very truly yours, (SGD.) MENARDO I. GUEVARRA Secretary Footnotes 1. R.A. No. 9484: An Act to Regulate the Practice of Dentistry, Dental Hygiene and Dental Technology in the Philippines, Repealing for the Purpose Republic Act No. 4419, Otherwise Known as "An Act to Regulate the Practice of Dentistry in the Philippines, and for Other Purposes," and Republic Act No. 768, Otherwise Known as "An Act to Regulate the Practice of Dental Hygienists in the Philippines, and for Other Purposes," and Appropriating Funds Therefor," 2 June 2007. 2. Entitled: Rules and Regulations of R.A. No. 9484, Known as "The Philippine Dental Act of 2007." 3. Executive Order No. 65, Promulgating the Eleventh Regular Foreign Investment Negative List , issued on 29 October 2018, took effect on 16 November 2018.