TO LLC OR NOT TO LLC: THAT, IS THE QUESTION!

nat rosasco • January 9, 2013

Limited Liability Companies, or “LLC” as they are more commonly known, have been the “entity du jour” over the past decade, and I’ve been asked by many a client what the real reasons are to choose an LLC over, for example, an S-Corporation, a Partnership or a traditional C-Corporation.  Choosing the most appropriate structure for […] The post TO LLC OR NOT TO LLC: THAT, IS THE QUESTION! appeared first on GGHH Law.

Limited Liability Companies, or “LLC” as they are more commonly known, have been the “entity du jour” over the past decade, and I’ve been asked by many a client what the real reasons are to choose an LLC over, for example, an S-Corporation, a Partnership or a traditional C-Corporation.  Choosing the most appropriate structure for your business can be confusing even for the most learned legal practitioner, and I find that most attorneys know which entity they should recommend but don’t necessarily know why.  In this article we’ll explore the differences between two of the most popular business structures, the LLC and the Subchapter S Corporation, or “S-Corp”.

The LLC and S-Corp are popular business structures for a variety of reasons, some of which the two have in common.  Both the LLC and the S-Corp are creatures of statute, meaning they are separate legal entities created by a state filing and subject to state-mandated formalities, such as filing annual reports and paying periodic filing fees.  Both entities are taxed like sole proprietorships (in the case of a single owner or shareholder) and partnerships (in the case of multiple owners or shareholders), meaning the company itself doesn’t pay federal taxes, but rather all company profits and losses are “passed through” to the individual owners, who report these tax attributes on their individual federal tax returns.  These two business structures also share another key feature in that they have the ability to separate the liabilities of the business from the personal assets of the owners, thereby shielding those assets from business obligations.  Despite the similarities, LLCs and S-Corps do differ in several ways, including their operational flexibility, administrative requirements, profit-sharing and employment tax implications, all of which we will explore in this article.

WHAT IS AN LLC ANYWAY?

According to the Internal Revenue Service, an LLC is an entity “designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership”.  Although many times you will hear practitioners refer to an LLC as a “limited liability corporation”, you should note that an LLC is not actually a corporation.  While both corporations and LLCs are created as a matter of state law, they are separate entities with entirely different governing rules and regulations.  Nevertheless, the LLC is a flexible form of business enterprise that combines elements of both the corporate and partnership structures.  As a pass-through entity, all profits and losses generated in an LLC are reported by the individual owners, or “members” as they are called, on their individual federal tax returns.  What differentiates the LLC from a partnership, however, is the limit of the liability for which a member is responsible, which in most cases will be limited to such member’s investment in the company.

HOW ABOUT AN S-CORP?

Like a C corporation, an S-Corp is a corporation organized pursuant to the laws of the state in which it is formed.  As in the case of an LLC, however, S-Corps resemble partnerships in the manner in which they are taxed, meaning all aspects of income, deductions and tax credits flow through to the shareholders, regardless of whether cash distributions or contributions are made.  S-Corps must make an affirmative election under Subchapter S of Chapter 1 of the Internal Revenue Code to be taxed as a partnership and the following requirements must be met in order to do so:

–        The entity making the election must be a domestic corporation;

–        The entity making the election may only have one class of stock;

–        The entity making the election may not have more than 100 shareholders;

–        Shareholders of the entity making the election must, subject to certain limited exceptions, be U.S. citizens and natural persons; and

–        Profits and losses allocated to the entity’s shareholders must be in proportion to each  shareholder’s interest in the business.

SO WHICH ONE IS RIGHT FOR MY BUSINESS?

As indicated above, LLCs and S-Corps differ in several ways, including but not necessarily limited to their operational flexibility, administrative requirements, profit-sharing and employment tax implications.  Understanding the differences will dictate which of these two popular entities are right for your business.

One of the primary differences between an LLC and an S-Corp is the amount of administrative formality that is required to maintain an S-Corp.  Remember, an S-Corp is in fact a corporation and therefore requires compliance with certain administrative formalities such as formation of a board of directors, annual reporting and other mandatory business filings, adopting by-laws, issuing stock, annual shareholder and director meetings with mandatory record keeping and other administrative requirements that a typical small business may not be prepared to deal with, particularly one with a single owner.  An LLC on the other hand requires far fewer forms for registration and generally lower start-up costs.  Limited Liability Company’s are not generally required to have formal meetings nor maintain minutes of meetings, though record keeping is still highly recommended.  With fewer administrative formalities to maintain, LLCs may be more difficult to penetrate by those seeking to challenge its shield of liability protection.  Generally, as long as the members of the LLC do not “co-mingle” funds, imposing liability beyond the LLC itself may be very difficult.

Another distinguishing feature between the LLC and the S-Corp is the operational and management flexibility inherent in an LLC versus the rigid structure of an S-Corp.  Most matters relating to governance of an LLC can be handled in one document, typically termed an “Operating Agreement” or “Limited Liability Company Agreement”, which is the governing document of the company.  Most state codes in fact allow members of an LLC to essentially override the LLC statute by otherwise agreeing in the operating agreement how the LLC will be governed.  The owners of an LLC can decide to be self-managed (or, “member-managed” as it is otherwise known) or manager-managed.  When member-managed, the LLC is run in the same manner as a partnership where the partners handle the day-to-day operations of the company.  When manager-managed, the LLC is run similar to a corporation, where the members may elect one or more people to handle the day-to-day decisions of the company.  S-Corps on the other hand, have directors and officers, where the board of directors makes major decisions and officers are elected to manage the company’s daily business.  Of course, an LLC also has the flexibility to “elect” officers if they so choose, but many business owners appreciate the simplicity of their businesses being managed by a manager they have the authority to appoint or remove in their sole discretion.

When organizing a new company involving more than one owner, particular attention should be paid to the allocation of the company’s profits and losses as well as the distribution of available capital.  S-Corporations, which are restricted to one class of stock, must allocate profits and losses pro-rata to its shareholders based on their relative share of ownership.  Thus, a shareholder who owns 25% of the company’s stock reports a distribution of 25% of the company’s year-end taxable profit or loss, as the case may be, on the shareholder’s individual federal tax return.  The one class of stock restriction governing S-Corps does not apply to LLCs, thereby allowing flexibility in planning distributions and allocations of profits and losses.  A business organized as an LLC may allocate profits and losses disproportionately among its members, taking into account factors such as sweat equity, preferred returns for members contributing more capital and other arrangements forming the basis for so-called “special allocations”.  The IRS may scrutinize such special allocations to ensure members are not attempting to evade taxation by allocating larger losses to members in higher income tax brackets, thus it is important to structure the allocations so that they have what the IRS terms “substantial economic effect”.  Consider the case of four members who form an LLC where three members put up an equal amount of cash while the fourth member signs a note to contribute his or her share in installments over the first five years of the business.  The operating agreement may provide that the first three members receive a larger distributive share of profits and losses for those five years during which the fourth member’s note is outstanding, even though all four members may each have an equal 25% ownership interest in the company.  The IRS should respect this arrangement given there is a legitimate financial basis for the special allocation (i.e., it has “substantial economic effect”).  It should be noted that an LLC’s structural flexibility would allow an operating agreement governing the foregoing company to provide for other restrictions, such as a limit on the fourth member’s ability to vote on certain issues affecting the company until the note is paid in full.  It is this structural flexibility that motivates many  entrepreneurs to choose the LLC for their new businesses.

While not generally a significant consideration for most new small business owners, it is important to note that owners of LLCs are considered to be self-employed and must therefore pay the 15.3% self-employment tax contributions towards Medicare and Social Security (note that the rate was effectively reduced in 2012 to 13.3% but is slated to return to 15.3% in 2013).  Thus, all the income of an LLC is subject to self-employment tax whereas a corporation may retain some of that income after payment of the owner’s salary and treat it as unearned income not subject to self-employment.  Of course, nothing is free in the eyes of the IRS as any such unearned income will be taxed at some point when it is distributed to the company’s shareholders as taxable dividend income.

While LLCs have been the entity of choice in recent years, the flexibility associated with its ownership and management structure in multi-member businesses comes with a price.  That price is reflected in what can be complex operating agreements reflecting the practical realities of an agreement among the owners.  In such situations it is important to remember that an operating agreement is not an “off-the-shelf” document that a practitioner or formation service can quickly plug names into and deliver without a thorough understanding of the member’s relative expectations.  LLC operating agreements may need to combine complex provisions usually found in shareholder agreements, separate buy-sell agreements, partnership agreements and even employment agreements.  Such provisions may affect issues such as capital contributions to the business, allocation and distribution of profits and losses as described above, members’ voting rights, admitting new members or removing existing ones, restrictions on transfer of membership interests and many others.  Each member should retain their own counsel experienced in business organizations to advise them of their relative rights and obligations before entering into any such agreement.

Jordan Uditsky is a partner in the corporate practice of Garelli, Grogan, Hesse & Hauert.  He brings a diverse legal and business background to the firm, with a particular emphasis on the representation of startups and emerging companies, commercial real estate transactions, tax and estate planning.  He advises businesses in a broad range of general corporate and corporate transactional matters, including business organizations and choice of entity issues, financing and private equity, mergers, acquisitions and joint ventures as well as business restructurings.  Mr. Uditsky also employs his experience as a business owner to advise companies on regulatory issues and compliance matters, employment policies and legal issues related to their general operations and business strategy.

Garelli Grogan Hesse & Hauert offers sophisticated yet cost effective, practical solutions to our clients’ legal challenges.  We strive to understand not only the legal issue but our clients’ business goals as well and craft tailored solutions to help them succeed.  Our attorneys represent businesses and individuals throughout the Midwest in matters that include commercial litigation, securities, business counseling and transactions, commercial real estate, estate planning and family law.  For more information contact Jordan Uditsky at (630)833-5533 x12 or juditsky@gghhlaw.com.

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FTC Drives Final Nails Into the Coffin of a Nationwide Non-Compete Ban

By Jordan Uditsky • October 15, 2025
For years, state courts and legislatures have taken a skeptical eye toward non-competition agreements. Judges here in Illinois and elsewhere routinely struck down overly broad and overreaching provisions, while an increasing number of jurisdictions have passed legislation or ordinances banning non-competes outright or limiting their scope and enforceability. During the Biden administration, the federal government injected itself into the heretofore state and local assault on non-competes. Both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) took the position, in a Final Rule and counsel's opinion, respectively, that almost all existing and future non-competes were void and unenforceable. Those actions were immediately challenged in court, and litigation about the FTC's ban resulted in dueling district court rulings, with injunctions issued against its enforcement in some cases, while other judges found the FTC had properly issued the Final Rule. The FTC subsequently appealed federal court rulings in Texas and Florida that invalidated or enjoined, respectively, the FTC's non-compete ban. Then came Election Day 2024. Nationwide Ban Abandoned, but Challenges to Non-Competes Remain Unsurprisingly, for an administration with a penchant for being business-friendly and regulation-averse, the newly comprised FTC quickly changed its tune on a nationwide non-compete ban. A series of moves this year has made it clear that the federal government, at least for the next three years, is abandoning any such blanket efforts. Specifically, the FTC moved in September to dismiss its appeals of two district court decisions that had struck down the Final Rule. Simultaneously, the commission took steps towards acceding to the vacatur of the non-compete ban . At the same time, however, the FTC has also indicated, through recent enforcement actions and warning letters , that it will continue to pursue remedies against employers on a case-by-case basis for the unlawful use of post-employment non-competes under Section 5 of the FTC Act, which prohibits "unfair methods of competition." Those FTC efforts, which are nothing new, mean the battle over the validity of non-compete agreements will continue to be fought largely at the state and local levels. Once again, dental practice owners and other employers will need to tailor their non-competition agreements to comply with the patchwork of jurisprudence, laws, and regulations of the states and localities where they have employees while remaining mindful of anti-competitive overreach that could attract the FTC's attention. With the nationwide non-compete ban dead and buried, but restrictions on and litigation about the enforceability of such agreements very much alive, now is an opportune time for practice owners to consult with experienced employment counsel who can review and revise any existing or contemplated non-competition provision as necessary. If you have questions about your company’s non-competes or would like assistance reviewing or drafting such agreements, please call Grogan Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

Negative Online Reviews of Your Dental Practice Can Sting, But an Ill-Advised Response Can Cause You Even More Pain

By Jordan Uditsky • September 19, 2025
As a 17 th -century French playwright, actor, and poet, Molière probably received his fair share of stinging, negative reviews of his work. While we may not know exactly how he felt about such critiques, he did offer some sage advice that dentists should heed when confronted with a patient’s scathing, hurtful, or untrue online review: “ A wise man is superior to any insults which can be put upon him and the best reply to unseemly behavior is patience and moderation .” Human nature being what it is, patience and moderation can be in short supply when a dentist reads a review that casts doubt on their competence, integrity, or professionalism, especially if they believe that the review’s content contains abject falsehoods or misrepresentations. Not only can such online comments make blood boil and bruise the ego, but even one negative review can have a devastating impact on a practice and its reputation. 84% of the public trusts online reviews to help them make consumer decisions, including those involving healthcare providers. According to some surveys, more than 70% of patients say they read reviews before selecting a healthcare provider, and nearly half would not consider a provider with fewer than four stars. Negative reviews can disproportionately influence perception, even if they represent a small fraction of feedback. Given that a single negative review can stand out in an otherwise glowing profile and, if left unaddressed, may deter potential patients, dentists understandably will want to respond, correcting misstatements or otherwise neutralizing the misrepresentations or assertions contained in the review. But those responses, if made reflexively and without careful consideration of legal and ethical boundaries, can make a bad situation worse or make the dentist appear petty and vindictive. Additionally, dentists who do decide to respond to a patient’s negative review publicly may inadvertently reveal confidential patient information in their attempts to refute allegations of poor or substandard care. Such transgressions can have catastrophic licensing and regulatory consequences for dentists. So what should dentists do when faced with a horrible review that every prospective patient can see? As discussed below, responses can, and often should, be made, but with the patience and moderation Molière recommended. Hitting Back v. Hitting HIPAA Perhaps the biggest risk dentists take when publicly responding to a patient’s negative review is inadvertently violating their HIPAA patient privacy obligations. Unlike other businesses, dentists cannot freely discuss the details of a patient’s complaint in a public forum. The HIPAA Privacy Rule prohibits disclosing protected health information (PHI) without patient authorization. Even acknowledging that the reviewer is a patient may constitute a privacy violation. For example, if a patient writes, “I had a terrible root canal here,” the dentist cannot reply with, “We offered you antibiotics, but you refused.” That would be a clear HIPAA violation. Instead, dentists should respond in general terms that neither confirm nor deny treatment specifics. Best Practices for Responding to Negative Reviews When deciding how and whether to respond, dentists should keep the following principles and tips in mind: Cool Off Before Going Off. The worst thing a dentist can do with a bad online review is to immediately post a response in the throes of anger and indignation, however justifiable those emotions may be. Before deciding whether and how to respond, take the time needed for your professionalism and rationality to come back to the fore. Stay Professional and Neutral. Never respond defensively or emotionally. A hostile reply can escalate the issue and further damage your reputation. Even if the review feels unfair, professionalism is key. Acknowledge Without Confirming. Responses should not confirm that the reviewer is or was a patient. Instead, use neutral language such as: “We take all feedback seriously and strive to provide excellent care. We encourage you to contact our office directly to discuss your concerns.” Take the Conversation Offline. Invite the reviewer to call or email the office to resolve the issue privately. This demonstrates attentiveness while protecting confidentiality. Highlight Practice Values. Use responses as an opportunity to reaffirm commitment to patient care. For example: “Our goal is to make every patient feel comfortable and well cared for. We welcome feedback to help us improve.” When Silence May Be Golden Not every negative review needs a reply. If the comment is clearly unreasonable, inflammatory, or fraudulent, sometimes the best response is no response—or a simple flagging of the review for removal. Consider not responding in the following circumstances: Abusive or Fake Reviews. If a review contains profanity, slander, or appears fraudulent, flag it for removal instead of responding. Ongoing Legal Disputes. If the complaint relates to malpractice or litigation, responding publicly can backfire and give the patient more ammunition for their claims. Obvious Spam. Automated or irrelevant reviews do not require acknowledgment. Can You Sue for Defamation? Sure. Will You Win? Probably Not. On more than one occasion, a panicked and indignant dentist or other client of mine has called me to ask whether they could and should sue their former patient for defamation for a harsh online review. The answer, of course, is that you are well within your rights to sue “YourDentalPracticeSucks123” or whoever it is that is trying to take a wrecking ball to your career. You can sue anybody for anything. Whether such a lawsuit will be successful or has any legal basis is another matter entirely. The fact is that even the most scathing negative online review, if susceptible to the principle of “innocent construction” (meaning the allegedly libelous statement is given a non-defamatory interpretation because it is deemed ambiguous) or is composed of opinions rather than demonstrably false allegations of misconduct, will likely not qualify as actionable defamation in most jurisdictions. Furthermore, such lawsuits can expose the offended dentist or other professional to backlash, ridicule, and bad publicity in the fast-moving and fickle world of social media. If you look to hold online review sites and other platforms responsible for false and defamatory information posted by reviewers, you won’t get terribly far. While you may be able to get a website to remove a particularly egregious post, Section 230 of the federal Communications Decency Act largely immunizes such sites from claims based on comments or reviews posted by third-party users. Is It a Subjective Opinion or a Factual Allegation? The most common issue that arises in defamation cases based on online reviews is the question of whether or not a statement was false. Only false statements of fact can form the basis of a defamation claim, not opinions, no matter how histrionic or counterfactual they may be. A statement of fact is one that can be objectively proved or disproved. Consider the two following hypothetical reviews of a dentist: “She was rude, impatient, and treated me disrespectfully. It was perhaps the worst experience I’ve ever had with a dentist in my entire life. She is horrible.” “He stole money from my purse and touched me inappropriately while I was under sedation.” The former is a non-actionable opinion, as the dentist will not be able to objectively prove whether or not she was, in fact, rude, disrespectful, and the cause of one of the worst experiences in the patient’s life. Contrast that with the latter statement that accuses the dentist of specific actions and misconduct that can be proven or disproven with evidence. Proactive Reputation Management The best defense against negative reviews is a steady stream of positive ones. Dentists can encourage satisfied patients to leave feedback by: Sending follow-up emails with review links Placing QR codes in the office for easy access Training staff to request reviews after successful appointments A high volume of positive reviews will dilute the impact of the occasional negative one and provide a more accurate picture of patient satisfaction. As infuriating as negative online reviews can be, it is the rare dentist who can make it through their career without leaving at least one patient dissatisfied or unhappy with their treatment. When a patient shares those feelings with the world, it can be easy to let it get under your skin. But sometimes, restraint can speak louder than a retort. If you have questions or concerns about negative online reviews or reputation management for your dental practice, please contact Grogan Hesse & Uditsky today at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

7 Ways The “One Big Beautiful Bill Act” Impacts Dental Practices and Owners

By Jordan Uditsky • August 20, 2025
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. One may question whether this sprawling piece of legislation deserves to be called “beautiful,” but it undoubtedly earns the “big” in its name, especially for small businesses like dental practices. That is because it contains several provisions that could have a significant impact on the tax obligations of practices and their owners. Most notably, the OBBBA solidifies significant tax reforms and exemptions that were part of the 2017 Tax Cuts and Jobs Act (TCJA). Here are seven aspects of the OBBBA that are of particular interest to dental practices and their owners. 1. Permanent Qualified Business Income (QBI) Deduction The 20 percent small business tax deduction (also known as the section 199a deduction) for sole proprietorships, partnerships, S-corporations, and LLCs, which was scheduled to expire at the end of 2025, is made permanent and extends the amount of income subject to the phase-out rules. Specifically, the income threshold for single taxpayers is expanded by $25,000 and for joint filers by $50,000. The bill also includes a new minimum deduction of $400 for taxpayers with at least $1,000 of qualified business income from one or more actively conducted trades or businesses in which they materially participate. 2. Expanding Section 179 Expensing The bill increases the Small Business Expensing Cap from $1.22 million to $2.5 million. It also brings back and makes permanent “bonus depreciation,” which allows for an immediate write-off of 100 percent (versus 40 percent) of the cost of new qualified property acquired after January 19, 2025, such as equipment, vehicles, and software. 3. Qualified Small Business Stock The OBBBA modifies the Qualified Small Business Stock (QSBS) provisions contained in Section 1202 of the Internal Revenue Code by increasing the amounts that can be excluded from gross income, raising the size limit for QSBS investments, and shortening the holding period so investors can take advantage of the provision's benefits earlier than before. Specifically: For QSBS issued after OBBBA's July 4, 2025, effective date, the per-taxpayer gain exclusion cap for the sale of QSBS is raised from $10 million to $15 million, with that threshold being adjusted for inflation starting in 2027. The exclusion amount will now be $15 million or 10x the basis in the stock, whichever is greater. The aggregate gross assets a C corporation may have for its stock to qualify as a qualified small business is now $75 million – up from $50 million - for stock issued after July 4, 2025, with the new limit to be adjusted for inflation beginning in 2027. For QSBS acquired after July 4, 2025, the holding period required to qualify for the QSBS gain exclusion drops from five years to three years. After three years, a 50% exclusion is available, increasing to 75% after four years, and reaching 100% exclusion after five years. 4. Enhancing the Employer-provided Childcare Credit Section 45F of the tax code, which is designed to incentivize businesses to invest in childcare, now provides qualifying small businesses (gross receipts of $25 million or less for the preceding five years) with a maximum tax credit of up to $600,000 per year on up to 50 percent of qualified childcare expenses provided to employees. This credit is effective beginning in 2026. 5. Employer-provided Student Loan Repayment Assistance The OBBBA makes the employer-provided student loan repayment benefit permanent, allowing employers to contribute up to $5,250 per year towards employees' student loans, tax-free for both the employer and employee. This annual limit will be adjusted for inflation starting in 2026, ensuring the benefit keeps pace with rising education costs. 6. Permanent, Inflation-Indexed Estate & Gift Tax Exemption The OBBBA permanently increases the unified federal estate and lifetime gift tax exemption to $15 million per individual ($30 million for married couples), indexed for inflation starting in 2026. If the TCJA’s exemption provisions had expired, the threshold would have dropped to approximately $7 million per individual. This stability allows ultra-high-net-worth individuals to accelerate lifetime gifting and fund trusts efficiently. Techniques such as SLATs (Spousal Lifetime Access Trusts) are now more powerful planning tools given the increased exemption scope. The generation-skipping transfer (GST) tax exemption is now also aligned with the $15 million per individual exemption, also indexed for inflation. 7. SALT Deduction Raised – For Some The law increased the state and local tax (SALT) deduction cap from $10,000 to $40,000; however, this cap is not universally available. If your modified adjusted gross income (MAGI) exceeds certain thresholds, the $40,000 cap will be phased out. For single filers, the phase-out starts at $250,000 MAGI. For joint filers, the phase-out starts at $500,000 MAGI. The deduction is reduced by 30% of the amount exceeding these thresholds until it reaches the original $10,000 cap for the highest earners. The income thresholds for the phase-out will increase by 1% annually from 2026 to 2029. If you have questions about the OBBBA and what it means for you and your practice, please contact Grogan Hesse & Uditsky today at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
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FTC Drives Final Nails Into the Coffin of a Nationwide Non-Compete Ban

By Jordan Uditsky • October 15, 2025
For years, state courts and legislatures have taken a skeptical eye toward non-competition agreements. Judges here in Illinois and elsewhere routinely struck down overly broad and overreaching provisions, while an increasing number of jurisdictions have passed legislation or ordinances banning non-competes outright or limiting their scope and enforceability. During the Biden administration, the federal government injected itself into the heretofore state and local assault on non-competes. Both the Federal Trade Commission (FTC) and the National Labor Relations Board (NLRB) took the position, in a Final Rule and counsel's opinion, respectively, that almost all existing and future non-competes were void and unenforceable. Those actions were immediately challenged in court, and litigation about the FTC's ban resulted in dueling district court rulings, with injunctions issued against its enforcement in some cases, while other judges found the FTC had properly issued the Final Rule. The FTC subsequently appealed federal court rulings in Texas and Florida that invalidated or enjoined, respectively, the FTC's non-compete ban. Then came Election Day 2024. Nationwide Ban Abandoned, but Challenges to Non-Competes Remain Unsurprisingly, for an administration with a penchant for being business-friendly and regulation-averse, the newly comprised FTC quickly changed its tune on a nationwide non-compete ban. A series of moves this year has made it clear that the federal government, at least for the next three years, is abandoning any such blanket efforts. Specifically, the FTC moved in September to dismiss its appeals of two district court decisions that had struck down the Final Rule. Simultaneously, the commission took steps towards acceding to the vacatur of the non-compete ban . At the same time, however, the FTC has also indicated, through recent enforcement actions and warning letters , that it will continue to pursue remedies against employers on a case-by-case basis for the unlawful use of post-employment non-competes under Section 5 of the FTC Act, which prohibits "unfair methods of competition." Those FTC efforts, which are nothing new, mean the battle over the validity of non-compete agreements will continue to be fought largely at the state and local levels. Once again, dental practice owners and other employers will need to tailor their non-competition agreements to comply with the patchwork of jurisprudence, laws, and regulations of the states and localities where they have employees while remaining mindful of anti-competitive overreach that could attract the FTC's attention. With the nationwide non-compete ban dead and buried, but restrictions on and litigation about the enforceability of such agreements very much alive, now is an opportune time for practice owners to consult with experienced employment counsel who can review and revise any existing or contemplated non-competition provision as necessary. If you have questions about your company’s non-competes or would like assistance reviewing or drafting such agreements, please call Grogan Hesse & Uditsky at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

Negative Online Reviews of Your Dental Practice Can Sting, But an Ill-Advised Response Can Cause You Even More Pain

By Jordan Uditsky • September 19, 2025
As a 17 th -century French playwright, actor, and poet, Molière probably received his fair share of stinging, negative reviews of his work. While we may not know exactly how he felt about such critiques, he did offer some sage advice that dentists should heed when confronted with a patient’s scathing, hurtful, or untrue online review: “ A wise man is superior to any insults which can be put upon him and the best reply to unseemly behavior is patience and moderation .” Human nature being what it is, patience and moderation can be in short supply when a dentist reads a review that casts doubt on their competence, integrity, or professionalism, especially if they believe that the review’s content contains abject falsehoods or misrepresentations. Not only can such online comments make blood boil and bruise the ego, but even one negative review can have a devastating impact on a practice and its reputation. 84% of the public trusts online reviews to help them make consumer decisions, including those involving healthcare providers. According to some surveys, more than 70% of patients say they read reviews before selecting a healthcare provider, and nearly half would not consider a provider with fewer than four stars. Negative reviews can disproportionately influence perception, even if they represent a small fraction of feedback. Given that a single negative review can stand out in an otherwise glowing profile and, if left unaddressed, may deter potential patients, dentists understandably will want to respond, correcting misstatements or otherwise neutralizing the misrepresentations or assertions contained in the review. But those responses, if made reflexively and without careful consideration of legal and ethical boundaries, can make a bad situation worse or make the dentist appear petty and vindictive. Additionally, dentists who do decide to respond to a patient’s negative review publicly may inadvertently reveal confidential patient information in their attempts to refute allegations of poor or substandard care. Such transgressions can have catastrophic licensing and regulatory consequences for dentists. So what should dentists do when faced with a horrible review that every prospective patient can see? As discussed below, responses can, and often should, be made, but with the patience and moderation Molière recommended. Hitting Back v. Hitting HIPAA Perhaps the biggest risk dentists take when publicly responding to a patient’s negative review is inadvertently violating their HIPAA patient privacy obligations. Unlike other businesses, dentists cannot freely discuss the details of a patient’s complaint in a public forum. The HIPAA Privacy Rule prohibits disclosing protected health information (PHI) without patient authorization. Even acknowledging that the reviewer is a patient may constitute a privacy violation. For example, if a patient writes, “I had a terrible root canal here,” the dentist cannot reply with, “We offered you antibiotics, but you refused.” That would be a clear HIPAA violation. Instead, dentists should respond in general terms that neither confirm nor deny treatment specifics. Best Practices for Responding to Negative Reviews When deciding how and whether to respond, dentists should keep the following principles and tips in mind: Cool Off Before Going Off. The worst thing a dentist can do with a bad online review is to immediately post a response in the throes of anger and indignation, however justifiable those emotions may be. Before deciding whether and how to respond, take the time needed for your professionalism and rationality to come back to the fore. Stay Professional and Neutral. Never respond defensively or emotionally. A hostile reply can escalate the issue and further damage your reputation. Even if the review feels unfair, professionalism is key. Acknowledge Without Confirming. Responses should not confirm that the reviewer is or was a patient. Instead, use neutral language such as: “We take all feedback seriously and strive to provide excellent care. We encourage you to contact our office directly to discuss your concerns.” Take the Conversation Offline. Invite the reviewer to call or email the office to resolve the issue privately. This demonstrates attentiveness while protecting confidentiality. Highlight Practice Values. Use responses as an opportunity to reaffirm commitment to patient care. For example: “Our goal is to make every patient feel comfortable and well cared for. We welcome feedback to help us improve.” When Silence May Be Golden Not every negative review needs a reply. If the comment is clearly unreasonable, inflammatory, or fraudulent, sometimes the best response is no response—or a simple flagging of the review for removal. Consider not responding in the following circumstances: Abusive or Fake Reviews. If a review contains profanity, slander, or appears fraudulent, flag it for removal instead of responding. Ongoing Legal Disputes. If the complaint relates to malpractice or litigation, responding publicly can backfire and give the patient more ammunition for their claims. Obvious Spam. Automated or irrelevant reviews do not require acknowledgment. Can You Sue for Defamation? Sure. Will You Win? Probably Not. On more than one occasion, a panicked and indignant dentist or other client of mine has called me to ask whether they could and should sue their former patient for defamation for a harsh online review. The answer, of course, is that you are well within your rights to sue “YourDentalPracticeSucks123” or whoever it is that is trying to take a wrecking ball to your career. You can sue anybody for anything. Whether such a lawsuit will be successful or has any legal basis is another matter entirely. The fact is that even the most scathing negative online review, if susceptible to the principle of “innocent construction” (meaning the allegedly libelous statement is given a non-defamatory interpretation because it is deemed ambiguous) or is composed of opinions rather than demonstrably false allegations of misconduct, will likely not qualify as actionable defamation in most jurisdictions. Furthermore, such lawsuits can expose the offended dentist or other professional to backlash, ridicule, and bad publicity in the fast-moving and fickle world of social media. If you look to hold online review sites and other platforms responsible for false and defamatory information posted by reviewers, you won’t get terribly far. While you may be able to get a website to remove a particularly egregious post, Section 230 of the federal Communications Decency Act largely immunizes such sites from claims based on comments or reviews posted by third-party users. Is It a Subjective Opinion or a Factual Allegation? The most common issue that arises in defamation cases based on online reviews is the question of whether or not a statement was false. Only false statements of fact can form the basis of a defamation claim, not opinions, no matter how histrionic or counterfactual they may be. A statement of fact is one that can be objectively proved or disproved. Consider the two following hypothetical reviews of a dentist: “She was rude, impatient, and treated me disrespectfully. It was perhaps the worst experience I’ve ever had with a dentist in my entire life. She is horrible.” “He stole money from my purse and touched me inappropriately while I was under sedation.” The former is a non-actionable opinion, as the dentist will not be able to objectively prove whether or not she was, in fact, rude, disrespectful, and the cause of one of the worst experiences in the patient’s life. Contrast that with the latter statement that accuses the dentist of specific actions and misconduct that can be proven or disproven with evidence. Proactive Reputation Management The best defense against negative reviews is a steady stream of positive ones. Dentists can encourage satisfied patients to leave feedback by: Sending follow-up emails with review links Placing QR codes in the office for easy access Training staff to request reviews after successful appointments A high volume of positive reviews will dilute the impact of the occasional negative one and provide a more accurate picture of patient satisfaction. As infuriating as negative online reviews can be, it is the rare dentist who can make it through their career without leaving at least one patient dissatisfied or unhappy with their treatment. When a patient shares those feelings with the world, it can be easy to let it get under your skin. But sometimes, restraint can speak louder than a retort. If you have questions or concerns about negative online reviews or reputation management for your dental practice, please contact Grogan Hesse & Uditsky today at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.

7 Ways The “One Big Beautiful Bill Act” Impacts Dental Practices and Owners

By Jordan Uditsky • August 20, 2025
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. One may question whether this sprawling piece of legislation deserves to be called “beautiful,” but it undoubtedly earns the “big” in its name, especially for small businesses like dental practices. That is because it contains several provisions that could have a significant impact on the tax obligations of practices and their owners. Most notably, the OBBBA solidifies significant tax reforms and exemptions that were part of the 2017 Tax Cuts and Jobs Act (TCJA). Here are seven aspects of the OBBBA that are of particular interest to dental practices and their owners. 1. Permanent Qualified Business Income (QBI) Deduction The 20 percent small business tax deduction (also known as the section 199a deduction) for sole proprietorships, partnerships, S-corporations, and LLCs, which was scheduled to expire at the end of 2025, is made permanent and extends the amount of income subject to the phase-out rules. Specifically, the income threshold for single taxpayers is expanded by $25,000 and for joint filers by $50,000. The bill also includes a new minimum deduction of $400 for taxpayers with at least $1,000 of qualified business income from one or more actively conducted trades or businesses in which they materially participate. 2. Expanding Section 179 Expensing The bill increases the Small Business Expensing Cap from $1.22 million to $2.5 million. It also brings back and makes permanent “bonus depreciation,” which allows for an immediate write-off of 100 percent (versus 40 percent) of the cost of new qualified property acquired after January 19, 2025, such as equipment, vehicles, and software. 3. Qualified Small Business Stock The OBBBA modifies the Qualified Small Business Stock (QSBS) provisions contained in Section 1202 of the Internal Revenue Code by increasing the amounts that can be excluded from gross income, raising the size limit for QSBS investments, and shortening the holding period so investors can take advantage of the provision's benefits earlier than before. Specifically: For QSBS issued after OBBBA's July 4, 2025, effective date, the per-taxpayer gain exclusion cap for the sale of QSBS is raised from $10 million to $15 million, with that threshold being adjusted for inflation starting in 2027. The exclusion amount will now be $15 million or 10x the basis in the stock, whichever is greater. The aggregate gross assets a C corporation may have for its stock to qualify as a qualified small business is now $75 million – up from $50 million - for stock issued after July 4, 2025, with the new limit to be adjusted for inflation beginning in 2027. For QSBS acquired after July 4, 2025, the holding period required to qualify for the QSBS gain exclusion drops from five years to three years. After three years, a 50% exclusion is available, increasing to 75% after four years, and reaching 100% exclusion after five years. 4. Enhancing the Employer-provided Childcare Credit Section 45F of the tax code, which is designed to incentivize businesses to invest in childcare, now provides qualifying small businesses (gross receipts of $25 million or less for the preceding five years) with a maximum tax credit of up to $600,000 per year on up to 50 percent of qualified childcare expenses provided to employees. This credit is effective beginning in 2026. 5. Employer-provided Student Loan Repayment Assistance The OBBBA makes the employer-provided student loan repayment benefit permanent, allowing employers to contribute up to $5,250 per year towards employees' student loans, tax-free for both the employer and employee. This annual limit will be adjusted for inflation starting in 2026, ensuring the benefit keeps pace with rising education costs. 6. Permanent, Inflation-Indexed Estate & Gift Tax Exemption The OBBBA permanently increases the unified federal estate and lifetime gift tax exemption to $15 million per individual ($30 million for married couples), indexed for inflation starting in 2026. If the TCJA’s exemption provisions had expired, the threshold would have dropped to approximately $7 million per individual. This stability allows ultra-high-net-worth individuals to accelerate lifetime gifting and fund trusts efficiently. Techniques such as SLATs (Spousal Lifetime Access Trusts) are now more powerful planning tools given the increased exemption scope. The generation-skipping transfer (GST) tax exemption is now also aligned with the $15 million per individual exemption, also indexed for inflation. 7. SALT Deduction Raised – For Some The law increased the state and local tax (SALT) deduction cap from $10,000 to $40,000; however, this cap is not universally available. If your modified adjusted gross income (MAGI) exceeds certain thresholds, the $40,000 cap will be phased out. For single filers, the phase-out starts at $250,000 MAGI. For joint filers, the phase-out starts at $500,000 MAGI. The deduction is reduced by 30% of the amount exceeding these thresholds until it reaches the original $10,000 cap for the highest earners. The income thresholds for the phase-out will increase by 1% annually from 2026 to 2029. If you have questions about the OBBBA and what it means for you and your practice, please contact Grogan Hesse & Uditsky today at (630) 833-5533 or contact us online to arrange for your free initial consultation. We focus a substantial part of our practice on providing exceptional legal services for dentists and dental practices, as well as orthodontists, periodontists, endodontists, pediatric dentists, and oral surgeons. We bring unique insights and deep commitment to protecting the interests of dental professionals and their practices and welcome the opportunity to work with you. Jordan Uditsky, an accomplished businessman and seasoned attorney, combines his experience as a legal counselor and successful entrepreneur to advise dentists and other business owners in the Chicago area. Jordan grew up in a dental family, with his father, grandfather, and sister each owning their own dental practices, and this blend of legal, business, and personal experience provides Jordan with unique insight into his clients’ needs, concerns, and goals.
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