Setting up a Primary Eyecare Company
Primary Eyecare Companies were originally incorporated by LOCSU in 2008 to provide contracting vehicles for LOCs to enter into NHS extended primary care service procurement activity.
Initially, one company was established for each LOC. Since then, there has been a significant level of company merger activity to reflect the changing NHS landscape. In just ten years, primary care trusts have given way to NHS England and clinical commissioning groups. This landscape is continuing to evolve with sustainable transformation plans/partnerships and integrated care providers in development.
The company model is fundamentally simple. Primary Eyecare Companies enter into contracts with NHS commissioners. The companies then subcontract service delivery to local optical practice subcontractors. Providing they meet accreditation requirements, these subcontractors may be any size of provider, from multiples to single independents.
It should be remembered that Primary Eyecare Companies are run by local directors at the behest of LOCs. Directors should understand that the LOC holds primacy over the company and retains the negotiation role with commissioners.
Primary Eyecare Companies are companies limited by guarantee which are incorporated by and registered with Companies House and are subject to the requirements of the Companies Act.
A company ‘limited by guarantee’ has no share capital or shareholders. Instead it has a member/s who undertake to contribute a nominal amount towards any shortfall in the company’s assets to settle its debts in the event of its being wound up. The member for all Primary Eyecare Companies is LOCSU. As is the case for Primary Eyecare Companies, most guarantee companies are not designed to make profits – that is, they do not distribute their profits to their members but either retain them within the company or use them for some other purpose. This is as outlined in the Memorandum and Articles of Association.
Memorandum and Articles of Association
When a company is registered
- A ‘memorandum of association’ is the legal statement agreeing to form the company,
- ‘Articles of association’ are the written rules about running the company