PCN Incorporation: The Why and the How

PCN incorporation does not mean the primary care network itself becomes a limited company. A PCN has no legal personality of its own, so it cannot be incorporated in the way a business normally is. What PCN incorporation actually means, in almost every case, is that the member practices set up a separate limited company alongside the network to take on specific functions, most commonly employing staff, while the practices themselves retain the underlying Network Contract DES.

This distinction matters because it shapes what incorporation can and cannot achieve. This guide sets out why PCNs consider incorporation, what a PCN corporate vehicle can actually do, and the practical and legal steps involved in setting one up properly.

Why “PCN Incorporation” Is a Slightly Misleading Term

Because the Network Contract DES is held by individual GP practices as an addition to their core GMS, PMS or APMS contract, and the PCN itself has no separate legal existence, there is no PCN entity to incorporate unless every member practice merged into one. What network practices actually do, when they talk about “incorporating the PCN”, is form a corporate vehicle that sits alongside the network and takes on delegated functions on the practices’ behalf, while the practices themselves continue to hold the DES contract and remain ultimately responsible for its delivery.

The scope of what the corporate vehicle does varies widely between networks. At one end, it might provide nothing more than back-office and administrative support. At the other, practices might sub-contract responsibility for the entire suite of clinical services delivered under the DES to the company. Most PCN companies sit somewhere in between, commonly taking on the employment of Additional Roles Reimbursement Scheme (ARRS) staff.

Why Networks Choose to Incorporate

As PCN workforce and shared funding have grown since the Network Contract DES began in 2019, so has the liability risk sitting with whichever practice or practices act as the informal lead for the network, typically the practice employing shared staff or hosting network funds on the others’ behalf. A limited company has its own legal personality separate from its member practices. It can enter contracts, own property and, critically, bear its own liabilities, meaning that by delegating functions such as staff employment to the company, member practices can pass on a meaningful share of the risk that would otherwise sit disproportionately on one lead practice.

Setting It Up: The Practical Steps

The starting point should always be function, not form. Deciding what the company is actually for, whether that is employing staff, holding a lease, or delivering a specific clinical service, should come before incorporation, not after. Companies formed without a clear purpose have a tendency to sit dormant, achieving nothing beyond adding an unnecessary layer of Companies House filing obligations.

The most commonly used vehicle for a PCN corporate structure is a company limited by shares, registered at Companies House, the kind of structure we set up through our company formations service. Each member practice typically holds one or more shares, either directly, in the case of a sole practitioner or an already-incorporated practice, or via a nominee partner, since a partnership itself is not a legal person capable of owning shares. The company’s articles of association need to be drafted to align with the network’s own governance structure, and the network agreement’s schedules will usually need updating to reflect the company’s role and its status as an associate member of the network. Getting these two documents, the network agreement and the company’s articles, to say consistent things about decision-making and liability is one of the most common points of failure we see in poorly executed PCN incorporations.

The Practical Obligations That Follow

Once the company exists and starts taking on functions, several further legal obligations follow, and each needs planning for before, not after, the company goes live.

• Staff transfers. Where the company will employ staff already employed by network practices, that transfer is subject to TUPE, meaning affected staff need proper consultation and their existing terms transfer with them, an area covered by our employment team.
• Employment business status. If the company employs staff and then supplies them to practices without exercising day-to-day control over their work, it may be acting as an employment business, which brings its own information and contractual requirements, though these are not especially onerous once identified.
• CQC registration. If the company performs any CQC-regulated activity, for example by sub-contracting clinical services, it needs its own CQC registration separate from the member practices’ existing registrations. Operating a regulated activity without registration is a criminal offence.
• NHS pension access. A newly formed company is unlikely to have automatic status as an NHS Pension Scheme employing authority, since that status generally depends on holding a qualifying NHS contract, which the company itself will not hold. Access typically needs to be applied for specially, and this should be resolved before staff transfer, not afterwards.
• Sub-contracting compliance. Where practices sub-contract DES obligations to the company, the commissioner (the Integrated Care Board) must be notified and retains a right to object or withhold consent, so this cannot be treated as a purely internal decision between the practices.

Governance: Who Sits on the Board

Ownership and management are legally separate in a company structure. Shareholders, typically the member practices, own the company, while a board of directors runs it day to day. In most PCNs, each practice nominates a director, often drawing on the existing PCN board or the Clinical Director for continuity, though larger networks sometimes adopt a smaller elected board with more significant decisions reserved to the full body of shareholders to avoid an unwieldy board. Aligning the PCN’s clinical governance structure with the company’s formal board structure avoids duplicated meetings and keeps clinical leadership time focused on patient care rather than administration.

How This Fits with the Wider PCN and Practice Structure

A PCN corporate vehicle does not replace the underlying Network Agreement between member practices, and it does not replace each practice’s own partnership agreement, which should still address how PCN and any company-related income and obligations are treated within the practice itself. We cover the underlying Network Agreement in Primary Care Networks Explained: A Legal Guide for GP Practices, and the individual practice partnership issues PCN and company involvement can raise in GP Partnership Agreements: What Every Partner Should Know. Practices weighing up incorporating their own core GP contract, as opposed to setting up a network-level company, should also read Incorporating a GP Practice: Is It Right for Your Practice?, since the legal issues overlap but are not identical. Clinical Directors carrying day-to-day governance responsibility should also see PCN Compliance and Governance: What Clinical Directors Need to Know.

What This Means for Your Network

PCN incorporation can be a genuinely useful tool for managing liability, employment risk and funding, but only where the corporate structure is designed around a clear purpose and properly aligned with the network agreement it sits alongside. We advise PCNs and their member practices on structuring, forming and governing PCN corporate vehicles. If this affects your network and you would like to talk it through, get in touch with our healthcare team or call us on +44 207 566 1188. You can also reach us by email at info@gurvelegal.com.