SRA Handbook

Expiry of recognition

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Version 1 of the Handbook was published on 16/09/2011. For more information, please click 'History' Above

Regulation 12: Expiry of recognition

12.1

If due to an event which could not reasonably have been foreseen, a recognised body is no longer a legal services body because the body no longer has at least one manager who is:

(a)

a solicitor;

(b)

an REL; or

(c)

a legally qualified body with at least one manager who is a solicitor or an REL;

but the SRA is informed of the fact within seven days of the event first occurring and the body becomes a legal services body again within 28 days of the event first occurring, then the recognised body will be deemed to have remained a legal services body and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.2

If an event which could not reasonably have been foreseen results in an LLP having fewer than two members, and therefore being in breach of rule 16.3 (requirement to have at least two members) of the SRA Practice Framework Rules, but within six months the situation is remedied, the LLP will be deemed to have remained in compliance with rule 16.3 of the SRA Practice Framework Rules and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.3

If a recognised body is a company with shares and a member or shareowner dies and is eligible to be a member or shareowner at the date of death, then, whether or not the personal representatives are themselves eligible to be members or shareowners, the personal representatives may replace the deceased member or shareowner in their capacity as personal representatives, provided that:

(a)

no vote may be exercised by or on behalf of a personal representative (and no such vote may be accepted) unless all the personal representatives are eligible to be members or shareowners;

(b)

no personal representative may hold or own a share in that capacity for longer than 12 months from the date of death;

(c)

within 12 months of the death the recognised body must cancel or acquire the shares or ensure that they are held and owned by persons eligible to be members or shareowners, but without this resulting in RFLs being the only shareowners; and

(d)

no vote may be exercised by or on behalf of any personal representative (and no such vote may be accepted) after the 12 month period has expired.

12.4

If, following the death of a member or shareowner, a company meets the requirements of 12.3 above the company will be deemed to have remained in compliance with Part 3 of the SRA Practice Framework Rules as to membership and share ownership, and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.5

If a recognised body is a company with shares and a member or shareowner ceases to be eligible to be a member or shareowner, or ceases to exist as a body corporate, then:

(a)

no vote may be exercised or accepted on the shares held by or on behalf of that member or shareowner;

(b)

in the case of a member or shareowner becoming ineligible, a trustee in bankruptcy or liquidator may (whether or not eligible to be a member or shareowner) replace that member or shareowner in the capacity of trustee or liquidator for a period which must not exceed six months from the date the member or shareowner became ineligible; and

(c)

the company must cancel or acquire the shares within six months, or within that time ensure that the shares are held and owned by persons eligible to be members or shareowners in compliance with Part 3 of the SRA Practice Framework Rules.

12.6

If 12.5 above applies and a company meets its requirements, the company will be deemed to have remained in compliance with Part 3 of the SRA Practice Framework Rules as to membership and share ownership, and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.7

If a recognised body is a company with shares and a member or shareowner becomes insolvent but remains eligible to be a member or shareowner, then the trustee in bankruptcy or liquidator (whether eligible or not) may replace the insolvent member or shareowner in the capacity of trustee in bankruptcy or liquidator, provided that:

(a)

no vote may be exercised by or on behalf of a trustee in bankruptcy or liquidator (and no such vote may be accepted) unless the trustee or liquidator is eligible to be a member or shareowner;

(b)

no trustee in bankruptcy or liquidator may hold or own a share in that capacity for longer than six months from the date of the insolvency;

(c)

within six months of the insolvency the company must cancel or acquire the shares or ensure that they are held and owned by persons eligible to be members or shareowners in compliance with Part 3 of the SRA Practice Framework Rules; and

(d)

no vote may be exercised by or on behalf of any trustee in bankruptcy or liquidator (and no such vote may be accepted) after the six month period has expired.

12.8

If 12.7 above applies and a company meets its requirements, the company will be deemed to have remained in compliance with Part 3 of the SRA Practice Framework Rules as to membership and share ownership, and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.9

A Court of Protection deputy appointed under section 19 of the Mental Capacity Act 2005 may be a member or shareowner in that capacity, without breaching Part 3 of the SRA Practice Framework Rules as to membership and share ownership, provided that:

(a)

the person in respect of whom the deputy has been appointed remains eligible to be a member or shareowner; and

(b)

if the deputy is not eligible to be a member or shareowner, no vote is exercised or accepted on the shares.

12.10

If 12.9 above applies and a company meets its requirements, the company will be deemed to have remained in compliance with Part 3 of the SRA Practice Framework Rules as to membership and share ownership, and to that extent will not be liable to have its recognition revoked under regulation 11.1(b).

12.11

If the only, or last remaining, solicitor or REL whose role in the body ensures compliance with the lawyer manager requirement under rule 13.1(a) (relevant lawyer requirement) of the SRA Practice Framework Rules and, subject to rule 22.3 of those rules, rule 13.1(b) of the SRA Practice Framework Rules (management and control requirement):

(a)

is committed to prison in civil or criminal proceedings;

(b)

becomes and continues to be unable to attend to the practice of the body because of incapacity caused by illness, accident or age;

(c)

becomes and continues to be a person who lacks capacity under Part 1 of the Mental Capacity Act 2005;

(d)

abandons the practice of the body; or

(e)

is made subject to a condition on his or her practising certificate or registration which would be breached by continuing to fulfil the role of lawyer manager within the body,

the body must inform the SRA within seven days of the relevant event and must within 28 days of the relevant event either ensure that the body can fulfil the lawyer manager requirement without reference to that person, or cease to practise.

12.12

Subject to regulation 12.1 to 12.11 above, a body's recognition will automatically expire if the body is wound up or for any other reason ceases to exist.