Helped to reduce tax burden for dentistry office and received a new medical license for a loyal Client

Who is the client?

• a legal entity, dentistry business;
• the client wanted to reduce the tax burden, since the activity in form of a medical center was financially unprofitable.

How did the client formulate the task? What solution was suggested and why?

The client was interested in changes which could let him run medical business in more optimal compared with activity in form of a medical center. The main problematic issues concerned the following:

• the need of a cash-register machine (PPO) for medical business (since the activity was performed in form of an LLC);
• the need of keeping an individual person with qualification of senior physician in the staff.

Since upon the moment of this repeated application the licensing law had changed indeed, our lawyers suggested getting a new license for a newly-formed individual entrepreneur who would take over the material and technical resources of the legal entity and the corresponding medical staff.

Registration of such an individual entrepreneur as a single tax payer would for some period allow providing medical services without PPO.

At the same time, organizing medical practice via individual entrepreneur does not require position of senior physician (only for health care institutions that are exceptionally legal entities).

What difficulties were there in implementation of the decision taken

• using the material and technical resources and the part of staff which had already been engaged in the licensing business of another business entity (although the final beneficiaries were the same persons);
• solving the question with the licensed legal entity after getting a new license for an individual entrepreneur.

Line of thinking and approach to lawyer’s work in implementation of the decision

Since the material and technical resources (lease of room, equipment etc) and the number of medical workers were still in the books of the legal entity, so the key task for our lawyers was correct transference of activity for individual entrepreneur’s activity.

In this case it was decided to inform about temporary suspension of activity in connection with impossibility of using the material and technical resources, since the premises lease was being transferred to another business entity. This decision allowed:

• informing in a proper way the licensing authority about the fact that the activity was not being performed;
• not to cancel the existing license, but simply to “freeze” it for further use in future.

Along with informing the licensing authority about suspension of legal entity’s activity, our lawyers kept consulting on getting a certificate of sanitary examination for the premises (since, with the change of business entity, there arises the need of getting a new certificate), and they also were preparing the package of documents for the Ministry of Health.  

Up on the moment the changes on the legal entity were engaged, we had a ready package of documents already where the only thing to do was submission for consideration by the licensing commission. As little as 3 weeks after that, a positive decision was taken on our client’s application.

What value did the client get? Why would he not have achieved that independently?

• narrow industrial expert examination – although the possibility of business structuring has existed for about 2 years, rather small part of representatives of health care sphere know about such a possibility;
• applying the scheme of structuring for situation of a particular client – although in most cases using a status of individual entrepreneur is more profitable, there also occur situations where by virtue of law the practice can be built exceptionally via legal entity;
• support of the procedure from selection of Classifiers of economic activities for individual entrepreneurs to official payment for the license issued by the Ministry of Health

For whom is it worth while applying to us? In what case?

Owners of medical business who at present are performing the economic activity in form of a limited liability company, a private enterprise etc. and who are not satisfied with the tax, personnel and other particularities of activity in form of a legal entity.