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5. Factors to consider in deciding the choice of corporate entity

There are several factors that may affect the choice of corporate entity:

  1. Primary care contracts: GMS contracts can only be held by a sole practitioner, a partnership or a company limited by shares (Section 44 of the NHS (Wales) Act 2006). Accordingly, if the participants want the flexibility of a vehicle that could take on a primary care contract, then this would suggest a CLS (which could also be a CIC) as the only option here. However, a CLG can hold an APMS primary care contract.
  1. Social enterprise: If a social enterprise is required then the options include a CIC, a CIO or an IPS
  1. Charity: However, if a charity is required then a CIO is the only option here
  1. Flexibility: some options are more flexible and make it easier to make changes to the entity or to add other groups to it as integration develops across the cluster
  1. Disclosure: the entities have different requirements for the disclose and publication of information (typically annual accounts and an annual return confirming shareholders / members and directors/officers) with the relevant regulator.
  1. Political context: the Welsh Government strongly supports the development of social enterprise models, and it is envisaged that cluster delivery vehicles will be a social enterprise/not for profit organisation that reinvests any surplus in the local members or local community. Accordingly, this would limit the choice of entity to a CIC, CIO or an IPS. If you wish to consider a different model to a CIC CLG discuss with your health board in the first instance.

It may also be useful to consider:

  • Who: who will be the members/directors of the entity (which providers in the area will be included, and which other stakeholders will be members) and what is their vision and purpose for the integration? 
  • What: what form best suits the vision and purpose (for example, is it important to be, and be seen as, a social enterprise)?
  • Where: is the company specific to the geography of one cluster or does it include more than one cluster area?
  • When: is it required now or at some other time in the evolution of the cluster as integration develops within it?
  • Why: why is it required and what are the opportunities and objectives it is being established to achieve?
  • How: what is required to get from where the providers are now to where they want to be?