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Developing a federated model of General Practice - The roles & responsibilities of a Shareholder

  • 30th April 2014

Developing a federated model of General Practice - The roles & responsibilities of a Shareholder

Shareholders provide the initial cash injection to set the company up, by purchasing shares°. This then provides the shareholder with certain rights. They also have certain duties and responsibilities, which are set out in the Companies Act 2006 (1) (or Companies Act relevant to the date that the company was formed).

"At BW Medical Accountants we have a way in which you can avoid locking this investment up in shares, and indeed, we view that as a fundamental error in the set up of the companies that form GP Federations. This is easily avoided with the right input and specialist advice."

Within the shareholders agreement for the company you will find a list of matters that have been reserved to the shareholders for a decision, within a general meeting. This list typically includes, borrowing money (in excess of agreed limits), selling the company, merging or amalgamating the company, appointing and removing directors.  There are other items; however, these will often vary from company to company, and are best developed as part of the set up of the company.

Additionally, there are two resolutions that can be voted on at a meeting:

1. an ordinary resolution, or
2. a special resolution.

An ordinary resolution can be passed if a simple majority of those entitled to vote votes in favour of the matter at a quorate meeting. All matters required to be decided by the members can be decided by ordinary resolution unless company law or the company's articles of association specify that a special resolution is needed.

A special resolution requires a 75% majority at a quorate meeting and must be filed at Companies House so that it appears on the public record.

For both types of resolution, the members can pass a resolution in writing provided the requisite majority signs the resolution to indicate their agreement.

The shareholders may in their shareholders' agreement vary the statutory decision making requirements provided that the minimum requirements of company law as described above are satisfied. For example, the shareholders' agreement may specify that certain matters must be decided by the members even where this is not a requirement of company law or the company's article's of association. The shareholders' agreement may also specify that a higher majority is required to decide certain matters than that set out in company law.

I know many of our readers will be surprised by how little is on the list; however, this is a very different way of working to being part of a Clinical Commissioning Group (CCG), or a Locality within a CCG. Additionally, as indicated in my previous blog, the Directors have overall control of the company and the decision making. This is often the reason that some practices remain outside of the federation; put simply they find it a way of working they cannot accommodate.  Having said that, my sense remains that there is little else on offer for those who remain outside of the federations being formed.  

I am commonly asked what the extent of any liabilities is for a shareholder in a company limited by shares? Put simply, the limit for a shareholder is the amount invested in the company, which also includes any unpaid loans they may have made to the company.

In our next issue, we will continue our look at corporate governance structures within a company, by exploring what the effective board look like.

For more information on how BW Medical Accountants can support you in forming a federation, or to arrange to speak to one of our experts please contact or call 0191 653 1022.

Additionally, if you should have questions for us please email and we will do our best to answer these within our blog and our LinkedIn Group 'GP Federations'. 

(Special thanks to specialist healthcare lawyer Alison Oliver at WardHadaway Law Firm for her assistance with this blog.)



Who writes this?

Scott Mckenzie

Scott Mckenzie

NHS Management Consultant
Find out more about Scott
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    Practice Manager
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    We have found Practice consultation and engagement from BW Medical specifically helpful to shape the future of the Practice.

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    Benfield Park Medical Group, Newcastle
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    The service we receive and the interest they show in our practice assures us that they have a genuine interest in us and commitment to us.  More importantly they are always helpful and polite to answer even the dumbest of questions!  They give us confidence and reassurance knowing that they are always very up-to-date with all the numerous changes within general practice and we would have no hesitation in recommending them to other practices seeking a professional and personal accountancy service.

    Jackie Rotherham, Practice Manager
    The James Street Family Practice, Lincolnshire
  • We moved to BW Medical Accountants in 2013 and we are delighted that we have.  Having been in the same business for over 20 years it is important to have a relationship with the accountancy team but most importantly you need to have trust.  We made the decision to move our business to BW Medical Accountants and having worked with the Team especially Tina we are very satisfied.  Tina going through the accounts brought to our attention many things that I was not aware of in the past.  The first years' experience can only be described as excellent.

    Customer service is first and foremost with BW and this shines through as each and every one of them are approachable, helpful and most importantly understand and know the business.  General practice is complex and is going to get more complex in the coming years.  We need Accountants who truly understand our business. We as a practice and as individuals would certainly recommend BW Medical Accountants.

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    Westbourne Medical Group, Sunderland
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