Setting up and operating Wholly Owned Subsidiaries

Michael Rourke

partner & LEAD CONTACT

• London, Southampton
• corporate, commercial
• m.rourke@hempsons.co.uk
• 020 7484 7648

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Hempsons have over a decade of experience in advising NHS bodies on the setting up and running of Wholly Owned Subsidiaries (“WOS”). Historically, Foundation Trusts have sought to establish WOS for a variety of reasons – including for income generation, to drive cultural change, to improve service delivery and to deliver efficiencies.

Since March 2025, NHS leaders have indicated that the creation of such WOS is to be a priority across the NHS – including to support system collaboration.

How We Can Help

We assist NHS organisations, whether acting individually or as a group, to determine lawful and appropriate legal structures for their unique proposals.

We work with VAT advisers and others to develop the business cases, advise on workforce relations, and take account of relevant NHS guidance and policy changes. We advise on difficult industrial relations issues including strikes and action short of strikes and how to address collective grievances designed to stop transfers of staff.

Once the appropriate structure has been selected, we handle the company formations and put in place the key contracts.

We share knowledge with our clients to manage WOS projects cost-effectively and efficiently.

Governance and compliance

• options appraisals
• corporate structure
• board structure
• decision making and oversight by the owning Trust
• CQC and MHRA regulation (concerning services to be supplied)
• advising on FoI issues
• advising on Health & Safety issues (clarifying roles and responsibilities)

Employment

• TUPE
• pensions orders
• restructuring and reorganisations
• policies reviews
• industrial action

Data Protection

• compliance with data sharing rules and GDPR

Procurement

• compliance with the Procurement Act 2023 tests for establishing WOS
• WOS compliance with procurement law going forward.

Commercial

• Due diligence and contract transfers on WOS formation
• transferring additional functions to an existing WOS
• setting up, managing, varying and terminating a range of supplier contracts
• project and procurement support

Real Estate

• premises ownership and occupation arrangements relating to the purpose of the WOS

Dispute Resolution

• disputes between WOS and contractors they have appointed

Examples of our work

We have advised on the establishment, development, and dissolution of many types of wholly owned and joint venture subsidiaries. WOS examples include: –

• Harrogate and District NHS Foundation Trust
  • Working in partnership with management consultants to establish an Estates and Facilities Maintenance subsidiary

• Chelsea and Westminster Hospital NHS Foundation Trust
  • advising on the establishment of a WOS to take over the running of the Trust’s outpatient pharmacy service from an outgoing provider

• University Hospital Southampton NHS Foundation Trust
  • advising on setting up a WOS to operate an outpatient pharmacy service
  • advising on setting up a WOS to operate a LINAC facility and staff offices

• Royal Surrey NHS Foundation Trust
  • advising on the formation of a pharmaceutical retail WOS
  • advising on setting up a WOS to operate managed healthcare facilities, procurement, stores and equipment management services.
  • advising on substantially extending the scope of the WOS services to include design, build and operate responsibility for a community diagnostics centre and a new clinical unit.

• Central and North London NHS FT
  • advising on a contractual joint venture between the WOS and an IT solution provider

Contact us