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Organisational Structures and the White Paper. Tim Merritt LLB (Hons) British Medical Association. Why Federate (or formally re-structure)?. GMS or PMS Practice Based Commissioning APMS Provider Arm GP Commissioning (White Paper). Different Types of Structure. Company Limited by Shares

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organisational structures and the white paper

Organisational Structures and the White Paper

Tim Merritt LLB (Hons)

British Medical Association

why federate or formally re structure
Why Federate (or formally re-structure)?
  • GMS or PMS
  • Practice Based Commissioning
  • APMS
  • Provider Arm
  • GP Commissioning (White Paper)
different types of structure
Different Types of Structure
  • Company Limited by Shares
  • Company Limited by Guarantee
  • Social Enterprise Company (including CIC)
company limited by way of shares
Company Limited by Way of Shares
  • Comprises of shareholders
  • Requires share capital (could be unpaid)
  • Shareholders/Directors liability is limited to amount of unpaid share capital
  • Income by way of directors’ remuneration and/or dividend issue
  • Ideal vehicle for revenue generation, i.e., profit making
  • Suitable for NHS pensions
company limited by way of guarantee
Company Limited by Way of Guarantee
  • Comprises of members rather than shareholders
  • Guarantee is £1 sterling on winding-up
  • Suitable for profit and non-profit activities
  • Best vehicle for membership organisations
  • Not suitable for NHS pensions
social enterprise
Social Enterprise
  • Not for profit
  • Of benefit to local community

BUT

  • Slightly more expensive than setting up limited company;
  • Asset Lock;
  • Capped profits;
  • No special tax status or tax breaks; and
  • Less flexible in its objectives
  • Income not pensionable under the NHS Pension Scheme (beware offers of lump sums by PCTs)
articles of association
Articles of Association
  • Articles of Association – managing the company
  • Think about:
    • Board – how are they elected?
    • Quorum and voting
    • Disqualification criteria
    • AGMs
    • Conflict of Interest
    • What does the company want to do?

(used to be in Memorandum of Association but now can be included in Articles of Association)

practical considerations
Practical Considerations
  • Registered office
  • Funding
  • Bank accounts and signatories
  • Disclaimers on websites/email
  • Letterheads
  • Staffing
pensions
Pensions
  • Company Limited by Way of Shares- only viable structure for pension purposes
  • Company Limited by Way of Guarantee- limited pension access (e.g. OOH)
  • Social Enterprise- no access to NHS Pension Scheme but staff could via Closed Direction
  • LLP- non-starter
pensions continued
Pensions Continued
  • Community Services Contracts- if already a GMS/PMS Provider, DH more relaxed about access BUT any new organisation will fail but may apply for Closed Direction
  • Sub-Contracting Work- no access because you are no longer the providing entity
tax and vat
TAX and VAT
  • Check with your accountant with regard to Tax liability
  • Check your employees and employment re VAT
slide12
TUPE
  • Transfer of Undertakings (Protection of Employment) Regulations 2006
  • Protects Staff on a “Business Transfer”
  • “Business Transfer”
    • Sale of Business/part of it
    • Change of Service Provider
    • Transfer of a Lease
    • Restructure of Business
effect
EFFECT
  • Protects Staff
  • Staff Automatically Transfer to New Entity
  • New Entity Inherits Staff, their Contracts of Employment and all rights/liabilities
    • Continuity Service – Preserved
    • Statutory/Contractual Claims
    • Personal Injury Claims
dismissals varying terms conditions
Dismissals & Varying Terms/Conditions
  • Protects Staff
  • Dismissal for reason connected with TUPE = Automatically unfair
  • Only Defence: Economic, Technical, Organisational (ETO) Reason
  • Can’t Change Terms and Conditions: Unless ETO reason
contract awards
Contract Awards
  • Usually via a successful bidding and tendering process
  • Watch out for the small print in the ITT
  • Bring in advisers at an early stage
  • Note: you are bound by what you say in the ITT
the white paper and commissioning
The White Paper and Commissioning
  • See the current GPC guidance
  • Beware of organisations telling you what to do or what will happen
  • What are consortia?

- the commissioning of secondary

healthcare will devolve to GP consortia

- public bodies regulated by statute

the white paper and commissioning continued
The White Paper and Commissioning Continued

- Commissioning will be aimed at “any

willing provider” including GP providers

- Every GP practice will have to

become a member of a consortium

- All consortium will be regulated and

controlled by The NHS

Commissioning Board

- The NHS Board will hold all core

primary care contracts (GMS/PMS

etc) – not the consortia

what can gps do now
What Can GPs Do Now?
  • Watch out for more documentation from the GPC
  • Be familiar with bidding/tendering and basic contractual issues
  • Do not set up as consortia now – the form of structures is not yet clear
bma law
BMA Law
  • Backing and expertise of the BMA
  • More cost effective than law firms - no ‘never-ending’ hourly rates
  • Fixed price package – more than just incorporation
  • An enhanced membership benefit – surplus goes straight back to membership services
  • No fees up front
  • Unlimited calls/meetings
  • Free scoping meetings
  • Insurance package
bma law full range of corporate commercial services
BMA LAW: Full range of corporate/commercial services
    • Setting up and advising on corporate structures
    • Employment law related to TUPE and corporate structures and drafting employment contracts
    • Commercial contract review
    • Bidding & Tendering advice
    • Negotiation and advice on larger medical contracts such as Polyclinics or establishment of Walk in Health Centres
    • Financial and VAT advice via external tax advisors
    • Seminars and workshops on: Directors Duties and Company Law Reform; Employment Law; Partnership Disputes & Splits; Medical Partnership Agreements; Libel & its consequences; Negotiation, Local Disputes and Basic Contract Law; Competition Law; Structures for LMCs
  • Contact – jmaw@bma.org.uk / 0207 383 6976