How to Set Up a PCN Limited Company

Setting up a Primary Care Network (PCN) limited company in England is a significant step for GP practices and healthcare providers who want to formalise their structure, manage workforce arrangements, and deliver integrated care efficiently. It can also open doors to new opportunities — from workforce management under the Additional Roles Reimbursement Scheme (ARRS) to long-term strategic partnerships with Integrated Care Boards (ICBs).

However, establishing a PCN limited company is not simply an administrative exercise. It requires careful consideration of governance, compliance, financial management, and regulatory frameworks — particularly in relation to CQC registration and the way regulated activities are delivered across your network.

At DKJ Support Services, we specialise in guiding primary care and healthcare providers through this complex process, including CQC registration for PCN limited companies. With our background in health and social care compliance, bid management, and operational leadership, we’ve supported hundreds of GP practices and networks in developing robust, compliant, and sustainable organisations. Whether you’re setting up a PCN company for the first time or restructuring an existing collaboration, our team can help you navigate every step with clarity and confidence.

What Is a PCN Limited Company?

Before starting the setup process, it’s essential to understand what a PCN limited company actually represents. A PCN limited company is a separate legal entity formed by the member practices of a Primary Care Network. It allows the network to operate as a formal business structure with its own governance, finances, and liabilities, distinct from those of the individual practices.

In many cases, the company serves as the delivery vehicle for network-based activities, such as employing ARRS staff, managing shared resources, or coordinating extended access and enhanced services. While each practice remains an autonomous GP provider, the limited company acts as the collective face of the network — giving it flexibility in holding contracts, employing staff, and engaging with partners such as NHS England, ICBs, and local authorities.

Incorporation also brings structure. By forming a company, the PCN gains a framework for decision-making, financial accountability, and regulatory compliance. It can also support future growth, enabling the network to bid for wider contracts or explore additional income streams within the boundaries of NHS guidance.

However, with this independence comes responsibility. Directors of the company will have formal duties under the Companies Act 2006 and will need to comply with statutory reporting, governance, and regulatory obligations, including those required by the Care Quality Commission (CQC).

Step One: Choosing the Right Legal Structure

The first step in setting up a PCN limited company is deciding on the most appropriate legal structure. For most networks, this will be either a company limited by shares (CLS) or a company limited by guarantee (CLG).

• Company limited by shares: This is the most common structure. Each member practice holds shares in the company, usually in proportion to their patient list size or agreed contribution. Profits (if any) can be distributed as dividends or reinvested in the network. This model offers flexibility and aligns with the way many GP practices already operate.
  
• Company limited by guarantee: In this model, the company does not have shareholders but guarantors who agree to contribute a nominal amount if the company is wound up. It’s a popular structure for not-for-profit organisations and may suit PCNs that wish to operate purely for service delivery without profit distribution.

Choosing between these structures requires consideration of your governance model, VAT implications, pension access, and long-term aims. It’s advisable to seek both legal and accounting advice at this stage. DKJ’s consultants work with PCN leaders to model each option, clarifying how ownership, liability, and tax responsibilities will operate in practice.

Step Two: Incorporating the Company

Once you’ve chosen your structure, the next step is to formally incorporate your company with Companies House. The process involves:

1. Selecting a company name – It must be unique and meet the naming rules set out by Companies House.
   
2. Preparing governance documents – These include the memorandum and articles of association, which define how the company will operate, who holds authority, and how decisions are made.
   
3. Appointing directors and shareholders (or guarantors) – Each PCN practice typically nominates a partner or director.
   
4. Registering the company – Submit your application (Form IN01) to Companies House, along with your documents, registered office address, and details of people with significant control.
   
5. Post-registration compliance – Once incorporated, register for Corporation Tax, set up a dedicated business bank account, and keep proper statutory records.

While incorporation itself is straightforward, ensuring that your governance documentation aligns with NHS expectations and the PCN Network Agreement is crucial. DKJ helps clients draft or review articles of association and shareholder agreements to make sure they reflect the collaborative principles and financial arrangements of the network.

Step Three: Developing the PCN Network Agreement

Every PCN in England must have a Network Agreement, as required by NHS England under the Network Contract DES. This document forms the legal foundation for how practices within the PCN will work together.

The Network Agreement must use the NHS-approved template, which includes mandatory clauses that cannot be altered. These clauses cover areas such as:

• Governance and decision-making arrangements.
  
• Funding allocation and management.
  
• The identity of the nominated payee (the organisation receiving PCN funding).
  
• Workforce management, including ARRS roles.
  
• Dispute resolution and exit procedures.

Your company’s governance documents must align with the Network Agreement, not replace it. The limited company can act as the operational or employing arm of the network, but the practices remain the legal members of the PCN under the DES contract.

DKJ works with networks to ensure both documents work seamlessly together — reducing duplication and ensuring clarity between the company’s directors and the PCN’s clinical leads. A well-drafted Network Agreement creates stability, defines responsibilities, and prevents confusion when financial or contractual issues arise later.

Step Four: Building Effective Governance

Establishing sound governance is at the heart of every successful PCN company. This is where strategic oversight meets practical management.

Typically, governance is managed through a Board of Directors. Each PCN practice may appoint one representative, and the Clinical Director often sits as a board member. The board is responsible for ensuring the company operates lawfully, ethically, and in line with NHS and CQC standards.

Good governance involves:

• Setting clear decision-making processes.
  
• Recording meetings and maintaining transparency.
  
• Managing risk and financial accountability.
  
• Ensuring staff are supported, trained, and compliant with clinical standards.
  

Directors also carry personal legal responsibilities under the Companies Act. This includes a duty to act in good faith, avoid conflicts of interest, and promote the company’s success for the benefit of its members.

DKJ frequently supports PCN boards in designing governance frameworks that balance clinical leadership with corporate responsibility — ensuring the board meets both NHS and company law requirements while remaining true to the values of primary care collaboration.

Step Five: Employing ARRS Staff Through the Company

One of the most common reasons PCNs form a limited company is to employ Additional Roles Reimbursement Scheme (ARRS) staff centrally. This can streamline HR processes, create consistency, and reduce the administrative burden on individual practices.

If your PCN company becomes the direct employer, you’ll need to ensure that employment contracts, payroll systems, and pension arrangements comply with NHS regulations. You’ll also need to manage TUPE transfers correctly if staff move from practices or federations into the new company.

Transferring staff without adhering to TUPE (Transfer of Undertakings Protection of Employment) regulations can create legal risk. The process must preserve existing staff terms and continuity of employment. In addition, you’ll need to apply for NHS Pension Scheme access if eligible, as this doesn’t happen automatically for PCN companies.

Our team at DKJ provides hands-on guidance in these areas, helping networks build compliant HR frameworks and ensuring all employment changes align with NHS and CQC requirements.

Step Six: Determining Whether CQC Registration Is Required

A key step that is often overlooked when forming a PCN limited company is determining whether the company itself must be registered with the Care Quality Commission (CQC).

If your company directly delivers clinical care — for example, through ARRS roles providing treatment, diagnostics, or home visits — then the company is legally providing regulated activities and must apply for CQC registration.

However, if all clinical activity continues to be delivered under the CQC registrations of the individual GP practices, and the company functions purely as an administrative or employment body, separate registration may not be required.

Understanding this distinction is critical. If your company is carrying out regulated activities, you must complete a full CQC registration for PCN limited companies, which includes:

• A Statement of Purpose outlining your services and objectives.
  
• Appointment of a Registered Manager.
  
• A Financial Viability Statement confirming the company’s stability.
  
• An ICO registration certificate for data protection compliance.
  
• Appropriate insurance and safeguarding policies.

Failure to register when required can result in enforcement action, so it’s always best to seek professional advice before launching services. At DKJ, we assess each client’s model individually to determine whether CQC registration applies and, if it does, we guide you through every stage of the process — from completing application forms to preparing for your first inspection.

Step Seven: Preparing for Compliance Under the CQC Framework

Once your company is registered, you’ll need to ensure ongoing compliance with the CQC’s Single Assessment Framework. This framework assesses every provider against five key questions:

• Is the service safe?
  
• Is it effective?
  
• Is it caring?
  
• Is it responsive?
  
• Is it well-led?

PCN limited companies delivering regulated activities must demonstrate evidence across all these domains. That includes maintaining up-to-date policies, staff training records, governance meeting minutes, incident reports, and evidence of patient feedback.

Even if your company doesn’t provide direct care, understanding these principles remains valuable. CQC expectations influence the way PCNs are managed, particularly in areas like data security, safeguarding, and leadership. DKJ’s compliance consultants help clients align their systems with the CQC’s quality statements, ensuring readiness for inspections and long-term operational safety.

Step Eight: Financial Viability and ICO Registration

Financial governance is another critical part of the setup process. The CQC will expect evidence that your organisation is financially stable and capable of delivering safe care. This is done through a Financial Viability Statement, usually prepared by your accountant, confirming that the company can operate sustainably for at least 12 months.

Equally important is ICO registration. Every organisation that processes patient information must register with the Information Commissioner’s Office and pay a small annual fee. You’ll need to provide your ICO registration certificate when applying for CQC registration.

Beyond compliance, strong financial management underpins the success of any PCN company. It ensures staff can be paid on time, funding can be tracked accurately, and the network can demonstrate value for money to both member practices and ICBs.

Step Nine: Working with NHS England and ICBs

PCN limited companies operate within the framework of the Network Contract DES. This means they must align with NHS England’s contractual arrangements and maintain clear relationships with the local Integrated Care Board (ICB).

Typically, PCN DES funding is paid to a nominated payee — usually one of the member practices or a federation. The PCN limited company may manage or deliver services, but it cannot directly hold a core GP contract unless structured specifically for that purpose.

Maintaining transparency with your ICB is essential. Regular communication ensures funding flows correctly and supports alignment with wider NHS strategies. DKJ’s consultants often assist networks in structuring their financial agreements with ICBs and creating governance models that promote collaboration rather than competition between practices.

Step Ten: Avoiding Common Pitfalls

Setting up a PCN limited company offers numerous benefits, but there are common pitfalls to avoid:

1. VAT issues: Shared staffing and management arrangements can unintentionally create taxable supplies. Specialist VAT advice is essential to avoid unexpected costs.
   
2. Inadequate governance: Failing to define decision-making processes early can lead to disputes.
   
3. Non-compliance with TUPE or pensions: Employment law must be handled carefully when transferring or hiring staff.
   
4. Incorrect assumptions about CQC registration: Many assume they are exempt, only to find later that they were providing regulated activities without approval.
   
5. Poor documentation: Network Agreements and company articles must be reviewed regularly to reflect changes in workforce, services, or membership.

Avoiding these issues requires foresight, planning, and a clear understanding of both NHS and CQC frameworks.

Step Eleven: The Role of Expert Support

At DKJ Support Services, we know that setting up a PCN limited company is not a one-size-fits-all process. Each network has its own structure, ambitions, and challenges. Our consultants work directly with PCN leaders to create a bespoke approach — from company formation and governance design to CQC registration and operational compliance.

We bring more than a decade of hands-on experience in healthcare operations, having supported GP practices, private clinics, and Primary Care Networks nationwide. We’re not just advisors; we’ve worked within the NHS and understand the pressures, deadlines, and expectations that providers face daily.

Our role is to make your setup process smoother, more compliant, and more sustainable. By ensuring your company is properly structured and registered, you can focus on what matters most — delivering safe, effective, and compassionate care to your patients.

Conclusion

Setting up a PCN limited company in England is an exciting opportunity to strengthen collaboration, improve efficiency, and deliver integrated healthcare. But success depends on more than just incorporation — it requires governance, compliance, and strategic foresight.

By taking time to plan your legal structure, develop a robust Network Agreement, and ensure your organisation meets CQC registration and data protection standards, your PCN can build a foundation for long-term sustainability.

At DKJ Support Services, we provide the expertise and guidance you need to do it right the first time. From forming your company and drafting governance documents to managing CQC registration for PCN limited companies, our team of experienced consultants will guide you every step of the way.

If you’re ready to take the next step towards a fully compliant and operational PCN limited company, contact DKJ Support Services today. We’ll help you turn a complex process into a confident, structured, and successful journey.

Sources:

The primary care network handbook 2021-22

Network Contract DES 2025/26 – Part B Guidance: Non-clinical – NHS England

Registration guidance: primary care networks, federations and GP services working in collaboration – Care Quality Commission