The SRA Handbook is no longer in effect. It was replaced by the SRA Standards and Regulations on 25 November 2019.

SRA Handbook

SRA Recognised Bodies Regulations 2011

Version 2 of the Handbook was published on 23/12/2011. For more information, please click 'History' Above

SRA Recognised Bodies Regulations 2011

Rules dated 17 June 2011 and commencing on 6 October 2011 made by the Solicitors Regulation Authority Board under sections 79 and 80 of the Solicitors Act 1974 and sections 9 and 9A of the Administration of Justice Act 1985, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007, making provision as to:

the procedures for, and the circumstances in which, bodies may be recognised by the SRA as suitable to undertake the provision of legal services, the duration of recognition and the circumstances in which recognition will expire or may be revoked;
the procedures for, and the circumstances in which, individuals who are not legally qualified may be approved by the SRA as suitable to be managers of recognised bodies, and the circumstances in which such approval may be withdrawn;
the form and manner of applications relating to the recognition of a body, the approval of an individual, and other applications under rules applying to recognised bodies, their managers and employees, and the fees to accompany such applications;
the circumstances in which a body's recognition may be made subject to a condition;
appeals relating to recognition of a body, conditions on recognition, or approval of an individual;
the names used by recognised bodies; and
the register of recognised bodies.

Part 1: Applications, conditions and appeals

Regulation 1: Form, timing and fees for applications

1.1

Applications under these regulations, or under any other rule which applies to a recognised body, its manager or employee, must comprise:

(a): the prescribed form, correctly completed;
(b): the fee or fees for the application, as determined from time to time by the SRA Board;
(c): if the application is for recognition or for renewal of recognition, any prescribed contribution to the Solicitors' Compensation Fund;
(d): such additional information, documents and references as may be specified by the SRA; and
(e): any additional information and documentation which the SRA may reasonably require.

It is not necessary to submit all documents, information and payments simultaneously, but an application will only have been made once the SRA has received all of the documentation, information and payments comprising that application.

1.2

An application for renewal of recognition must be sent to the SRA so as to arrive on or before the renewal date.

1.3

A recognised body must notify the SRA on or before the renewal date if it does not intend to apply for renewal of recognition.

1.4

The SRA shall determine the amount of any fees required under these regulations and the SRA's decision shall be final.

1.5

The SRA may prescribe from time to time a fee moderation process under which a recognised body may make an application for the fee for renewal of recognition to be varied. A decision under this process shall be final.

1.6

Every applicant body must:

(a): ensure that all information given in an application under these regulations is correct and complete; and
(b): notify the SRA as soon as any information provided in an application under these regulations has changed.

Regulation 2: Initial recognition and renewal of recognition

2.1

The SRA may grant an application for initial recognition or renewal of recognition, if it is satisfied that the applicant body is a partnership, LLP or company which meets the conditions in (a) to (d) below:

(a)

the body complies with rules 15 and 16 of the SRA Practice Framework Rules in relation to:

(i): its formation as a body corporate or partnership;
(ii): its composition and structure, including any necessary approval of a participant under regulation 5; and
(iii): its practising address (and if appropriate, its registered office) in England and Wales;

(b)

the body complies with the SRA Indemnity Insurance Rules;

(c)

the body complies with (or has a waiver of) rule 12 of the SRA Practice Framework Rules; and

(d)

if the body is a partnership, it has adopted a name under which it is to be registered, and which complies with Chapter 8 of the SRA Code of Conduct (Publicity).

2.2

The SRA may refuse an application for initial recognition if:

(a): the SRA is not satisfied that a manager or a person with an interest in the body is a suitable person to be engaged in the management or ownership of a recognised body, taking into account that person's history, character, conduct or associations;
(b): the SRA is not satisfied that the body's managers or owners are suitable, as a group, to operate or control a business providing regulated legal services; or
(c): for any other reason the SRA reasonably considers that it would be against the public interest to grant recognition.

2.3

In reaching a decision under 2.2 the SRA may take into account:

(a): any event listed in regulation 3.1 of the SRA Practising Regulations applying to a manager of the applicant body;
(b): any other conduct on the part of a manager of the applicant body which calls into question his or her honesty, integrity or respect for law;
(c): failure or refusal to disclose, or attempts to conceal, any matter within (a) or (b) above in relation to the application;
(d): that the SRA is not satisfied that the managers of the applicant body, taken together, have sufficient skills and knowledge to run and manage a business which provides regulated legal services,

and any other facts which the SRA reasonably considers should be taken into account.

2.4

If, when considering an application for renewal of recognition, the SRA:

(a): is not satisfied that the body's managers, taken together, are suitable to run and manage a business providing regulated legal services; or
(b): considers that for any other reason it would not be in the public interest to renew the body's recognition,

the SRA may defer renewal of recognition pending a decision whether the body's recognition should be revoked under regulation 11.

2.5

A grant of initial recognition takes effect from the date of the decision unless otherwise stated.

2.6

Ability of SRA to impose conditions

(a): When granting an application for recognition or for renewal of recognition the SRA may impose a condition in accordance with regulation 6.
(b): The granting of recognition free of conditions under regulation 2 does not prevent the SRA subsequently imposing a condition under regulation 6.

Regulation 3: Fee determinations for acquisitions, mergers and splits

The turnover of a recognised body for the purpose of determining the fee for renewal of recognition is based on a historic turnover figure submitted to the SRA. Where in the 12 months following the submission of that figure a recognised body merges or splits, a notice of succession identifying all recognised bodies, licensed bodies and recognised sole practitioners affected by the merger or split and any resulting apportionment of the historic turnover figures for those firms will enable the SRA to ensure that the turnover figure on which the fee is based reflects the impact of the merger or split.

3.1

A recognised body which has succeeded to the whole or a part of one or more recognised bodies, licensed bodies or recognised sole practitioners must within 28 days of the change taking place deliver to the SRA a notice of succession in the prescribed form.

3.2

For the purposes of regulation 3.1, "succeeded" includes any taking over of the whole or any part of a recognised body, licensed body or recognised sole practitioner, for value or otherwise.

3.3

A recognised body which:

(a): has split or ceded part of the practice to a recognised body, licensed body or recognised sole practitioner; and
(b): wishes this change to be considered by the SRA when determining the recognised body's next fee for renewal of recognition

must within 28 days of the change taking place deliver to the SRA a notice of succession in the prescribed form.

3.4

A notice of succession delivered under these regulations must:

(a): identify all recognised bodies, licensed bodies and recognised sole practitioners affected by the succession; and
(b): provide details of any resulting apportionment of the turnover figures for those recognised bodies, licensed bodies and recognised sole practitioners.

3.5

A recognised body delivering a notice of succession under these regulations must seek the agreement of all affected recognised bodies, licensed bodies or recognised sole practitioners to the contents of the notice of succession.

3.6

Where a notice of succession is delivered to the SRA which has not been agreed by all affected recognised bodies, licensed bodies or recognised sole practitioners, the recognised body delivering the notice of succession shall be treated as having made an application for the SRA to apportion the turnover figures of the affected recognised bodies, licensed bodies or recognised sole practitioners for the purposes of determining the fee for renewal of recognition.

3.7

Before apportioning the turnover figures under regulation 3.6, the SRA will contact any affected recognised body, licensed body or recognised sole practitioner identified in the notice of succession who has not agreed with the notice of succession and may require the production of additional information.

3.8

A turnover figure submitted to the SRA shall be calculated in accordance with the SRA's prescribed method of calculation.

Regulation 4: Duties in relation to compliance

4.1

A recognised body must not take on a new manager without first being satisfied of that manager's eligibility, by:

(a)

checking that any solicitor has a practising certificate, that any REL or RFL is registered with the SRA, and that the practising certificate or registration is not subject to a condition which would preclude that person becoming a manager;

(b)

obtaining (and retaining, for production to the SRA if required), in respect of any lawyer authorised by an approved regulator but not by the SRA, written confirmation from the approved regulator to the effect that the lawyer is authorised by that approved regulator, entitled to practise and not subject to a condition or other restriction which would preclude that person becoming a manager;

(c)

obtaining (and retaining, for production to the SRA if required), in respect of any individual who is entitled to be a manager only by virtue of approval under regulation 5, written confirmation:

(i): from the SRA that the individual concerned is approved under regulation 5; and
(ii): from the individual concerned, details of any event which the body will have to declare when next renewing its recognition, which has occurred in relation to that individual since he or she was last a manager of a recognised body renewing its recognition; and

(d)

in relation to any body corporate, making checks and obtaining (and retaining, for production to the SRA if required) confirmations under (a) to (c) above in respect of every individual who is a manager of or who has an interest in that body corporate.

4.2

The following persons in a recognised body must not create any charge or other third party interest over their interest in the recognised body:

(a): a partner in a partnership;
(b): a member of an LLP;
(c): a member or shareowner in a company except by holding a share as nominee for a non-member shareowner who is eligible to be a member or shareowner under rule 16.1 of the SRA Practice Framework Rules.

Regulation 5: Approval of an individual as suitable to be a manager

5.1

An individual who is not a lawyer of England and Wales, an REL, an RFL or an EEL must be approved by the SRA under this regulation in order to be:

(a): a manager or owner of a recognised body; or
(b): a manager of a body corporate which is a manager of a recognised body.

5.2

The following are not eligible for approval under this regulation:

(a): a member (practising or non-practising) of any profession coming within the meaning of lawyer of England and Wales (including a solicitor);
(b): an REL;
(c): an RFL;
(d): an EEL; and
(e): a member (practising or non-practising) of any profession eligible for approval by the SRA under paragraph 2(2) of Schedule 14 to the Courts and Legal Services Act 1990;

except that an individual who is not a solicitor or a practising member of any profession of lawyers, but is a non-practising barrister or a non-practising member of another profession of lawyers, and who is prevented by his or her professional rules or training regulations from changing status so as to be able to practise through the recognised body as a practising lawyer, may apply for approval under this regulation.

5.3

The SRA has a discretion to reject an application under regulation 5 if it is not satisfied that the individual concerned is suitable to be involved in the provision of legal services, and to exercise influence over the conduct of the recognised body concerned because:

(a)

the applicant, the individual concerned or any recognised body, licensed body or authorised non-SRA firm in which that individual has previously been a manager, or owner, compliance officer or employee, has been:

(i): reprimanded, made the subject of disciplinary sanction or made the subject of an order under section 43 of the SA, ordered to pay costs or made the subject of a recommendation to the Society or the SRA to consider imposing a condition by the Tribunal, or struck off or suspended by the court;
(ii): (made the subject of an order under section 43 of the SA, by the Society or the SRA or rebuked or fined by the SRA under section 44D of the SA, or paragraph 14B of Schedule 2 to the AJA;
(iii): intervened in by the SRA (or previously by the Society) or by any other approved regulator;
(iv): notified in writing by the SRA (or previously by the Society) that it does not regard as satisfactory an explanation given at the SRA's (or the Society's) request; or
(v): made the subject of disciplinary sanction by, or refused registration with or authorisation by, another approved regulator, professional or regulatory tribunal, or regulatory authority, whether in England and Wales or elsewhere,

in respect of a matter involving the individual concerned;

(b)

the individual concerned:

(i): has been committed to prison in civil or criminal proceedings;
(ii): has been disqualified from being a company director;
(iii): has been removed from the office of charity trustee or trustee for a charity by an order within the terms of section 72(1)(d) of the Charities Act 1993;
(iv): is an undischarged bankrupt;
(v): has been adjudged bankrupt and discharged;
(vi): has entered into an individual voluntary arrangement or a partnership voluntary arrangement under the Insolvency Act 1986;
(vii): has been a manager of a recognised body or licensed body which has entered into a voluntary arrangement under the Insolvency Act 1986;
(viii): has been a director of a company or a member of an LLP which has been the subject of a winding up order, an administration order or administrative receivership; or has entered into a voluntary arrangement under the Insolvency Act 1986; or has been otherwise wound up or put into administration in circumstances of insolvency;
(ix): lacks capacity (within the meaning of the Mental Capacity Act 2005) and powers under sections 15 to 20 or section 48 of that Act are exercisable in relation to that individual;
(x): is the subject of outstanding judgments involving the payment of money;
(xi): is currently charged with an indictable offence, or has been convicted of an indictable offence or any offence under the SA, the Financial Services and Markets Act 2000, the Immigration and Asylum Act 1999 or the Compensation Act 2006;
(xii): has been the subject of an order under section 43 of the SA;
(xiii): has been disqualified from acting as a HOLP or a HOFA or from being a manager of, or being employed by, a licensed body or an authorised non-SRA firm;
(xiv): has been the subject of an equivalent circumstance in another jurisdiction to those listed in (i) to (xiii); or
(xv): has been involved in other conduct which calls into question his or her honesty, integrity or respect for law;

(c)

the applicant or the individual concerned fails to disclose, refuses to disclose or seeks to conceal any matter within (a) or (b) above in relation to the application.

5.4

Application for approval

(a)

The application for approval must be made by the recognised body or prospective recognised body concerned and may be made:

(i): when applying for initial recognition; or
(ii): at any time after recognition has been granted.

(b)

It is for the applicant body to demonstrate that the individual concerned meets the criteria for approval.

(c)

The applicant body must:

(i): co-operate, and secure the co-operation of the individual concerned, to assist the SRA to obtain all information and documentation the SRA requires in order to determine the application;
(ii): obtain all other information and documentation in relation to that individual which the prescribed form requires the body to obtain and keep; and
(iii): keep all information and documentation under (ii) above for a period of not less than six years after the individual concerned has ceased to be a manager of the body.

(d)

The individual concerned must confirm in the application that the information supplied about him or her is correct and complete.

5.5

Approval

(a)

Approval takes effect from the date of the decision unless otherwise stated.

(b)

The SRA's decision to approve or refuse approval must be notified in writing to the applicant body and, separately, to the individual concerned.

(c)

If the applicant body is a recognised body it must not allow the individual concerned to become a manager until it has received written notice that the individual has been approved.

(d)

Approval continues until:

(i): it is withdrawn; or
(ii): two years have elapsed during which the individual has not been a manager of a recognised body;

whichever is the sooner.

5.6

The SRA may at any time require the production of information or documentation from:

(a): an approved individual;
(b): a recognised body in which an approved individual is a manager; or
(c): the body which originally obtained approval for that individual and holds information and documentation under 5.4(c)(iii) above;

in order to satisfy the SRA that the individual met the criteria for approval or continues to meet the criteria for approval.

5.7

Withdrawal of approval

(a): The SRA may decide to withdraw approval if it is not satisfied that an approved individual met the criteria for approval or continues to meet the criteria for approval or if information or documentation is not promptly supplied in response to a request made under regulation 5.6.
(b): Subject to (c) below, withdrawal of approval takes effect on expiry of the notice period under regulation 8.2(b) or on such later date as may be stated in the notice.
(c): If an appeal is made before the withdrawal of approval takes effect, the withdrawal of approval is suspended pending determination or discontinuance of the appeal, unless in the opinion of the SRA the proceedings on that appeal have been unduly protracted by the appellant or are unlikely to be successful.

5.8

Where withdrawal of approval relates to a director of a company, the SRA may set separate dates for that individual ceasing to be a director and disposing of his or her shares.

Guidance note

(i): The approval process under regulation 5 will cease when recognised bodies are transitioned to be regulated under the SRA Authorisation Rules. Non-lawyers who are managers of recognised bodies at that time will be deemed approved as managers for the purpose of rule 8.6 of the SRA Authorisation Rules. The regulation 5 approval of non-lawyers who are not managers at that time will lapse. A fresh approval will need to be applied for under the SRA Authorisation Rules.

Regulation 6: Conditions on recognition

6.1

The SRA may impose one or more conditions on a recognised body's recognition:

(a): when granting initial recognition;
(b): when granting renewal of recognition;
(c): when granting approval of an individual under regulation 5;
(d): when deciding to withdraw approval of an individual under regulation 5; or
(e): at any other time.

6.2

The purposes for which the SRA may impose a condition are set out in (a) to (g) below.

(a)

The SRA considers that:

(i): the condition would limit, restrict, halt or prevent an activity or activities on the part of the body, or of a manager or employee of the body, which is putting or is likely to put at risk the interests of clients, third parties or the public, and
(ii): it is in the public interest to impose the condition.

(b)

The SRA considers that:

(i): the condition would limit the activities of a manager or employee of the body who is considered unsuitable to undertake a particular activity, either at all or save as specified in the condition, and
(ii): it is in the public interest to impose the condition.

(c)

The SRA considers that:

(i): the condition would limit, halt or prevent a risk to clients, third parties or the public arising from a business agreement or association which the body has or is likely to enter into, or a business practice which the body has or is likely to adopt, and
(ii): it is in the public interest to impose the condition.

(d)

A relevant insolvency event within the meaning of paragraph 32(1A) of Schedule 2 to the AJA has occurred in relation to a recognised body, and:

(i): the event has not triggered expiry of recognition under regulation 12, and
(ii): the SRA considers that it is in the public interest to impose the condition.

(e)

The SRA considers that imposing the condition will, in the public interest, facilitate closer monitoring by the SRA of compliance with rules and regulations on the part of the body.

(f)

The SRA considers that imposing the condition will, in the public interest, require the body concerned to take specified steps conducive to the carrying on of efficient practice by that body.

(g)

The SRA considers, in any other case concerning a body which is currently recognised, that it would be in the public interest to impose the condition.

6.3

A condition imposed under this regulation takes effect from the date on which the condition is imposed unless a later date is specified in the condition.

Regulation 7: Change in composition of a partnership and temporary emergency recognition following a partnership split

7.1

Recognition may continue despite a change in the composition of a recognised body which is a partnership, subject to (a) and (b), 7.2 and 7.3 below.

(a): A recognised body which is a partnership must cease to practise from the date of any failure to comply with Part 3 of the SRA Practice Framework Rules.
(b): A recognised body which is a partnership must cease to practise from the date of any change which results in there being no remaining partner who was a partner before the change; the 28 day period in 12.1 below does not apply.

7.2

If a partnership change results in there being only one remaining principal who or which needs to be recognised as a recognised sole practitioner but could not reasonably have commenced an application in advance of the change, the firm need not cease to practise if the remaining principal:

(a): is a solicitor or REL;
(b): notifies the SRA within seven days;
(c): is granted temporary emergency recognition under the SRA Practising Regulations.

7.3

If a partnership split brings into being a new partnership which is not a recognised body but is a legal services body which satisfies the requirements of rule 13 of the SRA Practice Framework Rules:

(a): the SRA must be notified within seven days; and
(b): temporary emergency recognition may be granted, under these regulations, subject to 7.5, 7.6 and 7.8 below, so as to enable the partners in the new partnership to practise through the new partnership for a limited period without breach of the law.

7.4

Following such a partnership split, the SRA will if necessary decide which of the groups of former partners will continue to be covered by the existing recognition and which must apply for a new recognition, and may apportion recognition fees and Compensation Fund contributions between the groups. Any such decision will be without prejudice to the outcome of any legal dispute between the former partners.

7.5

An application for temporary emergency recognition must be made on the prescribed form within seven days of the change and accompanied by all information and documentation the SRA reasonably requires.

7.6

The SRA may grant an application for temporary emergency recognition if the following conditions are met.

(a): The SRA must be satisfied that the partners could not reasonably have commenced an application for recognition in advance of the change.
(b): The partnership must otherwise comply with rules 15 and 16 of the SRA Practice Framework Rules in relation to its composition and structure and its practising address in England and Wales.
(c): The partnership must comply with the SRA Indemnity Insurance Rules, and must have adopted a name under which it is to be registered and which complies with Chapter 8 of the SRA Code of Conduct.

7.7

If the principal(s) in the new firm could not reasonably have commenced an application for recognition in advance of the change, the new firm may practise from the date of the split provided that the following conditions are met:

(a)

the new firm is:

(i): a partnership which complies with Part 3 of the SRA Practice Framework Rules in its formation, composition and structure; or
(ii): a solicitor or REL sole practitioner;

and complies with the SRA Indemnity Insurance Rules;

(b)

the new firm notifies the SRA within seven days; and

(c)

the SRA grants the firm temporary emergency recognition.

7.8

Temporary emergency recognition:

(a): may be granted initially for 28 days;
(b): may be granted to have effect from the date of the partnership split or any other appropriate subsequent date;
(c): may be extended in response to a reasonable request by the applicant;
(d): must be extended (subject to (h) below) pending determination of a substantive application for initial recognition commenced during the currency of a temporary emergency recognition;
(e): may be granted or extended subject to such conditions as the SRA thinks fit, in circumstances falling within regulation 6;
(f): is to be treated as initial recognition for the purpose of these regulations;
(g): if granted, cannot prejudice the discretion of the SRA to refuse a substantive application for recognition of the body under regulation 2 (which is also, for the purpose of these regulations, to be treated as initial recognition); and
(h): in exceptional circumstances, and for reasonable cause, may be revoked at any time.

7.9

During the initial 28 day period, or such extended period as the SRA may allow, the new firm must:

(a)

cease to practise, and notify the SRA; or

(b)

commence a substantive application for recognition:

(i): as a recognised sole practitioner under the SRA Practising Regulations, or
(ii): as a recognised body under these regulations,

by submitting a completed application form, together with the prescribed fee and any Compensation Fund contribution required.

7.10

If a partner in a partnership which is a recognised body:

(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 as a partner;

and this results in there being only one active partner, that partner must inform the SRA within seven days.

Guidance note

(i): If a partnership split brings into being a new partnership which is a licensable body (see rule 14 of the SRA Practice Framework Rules) an application may be made for temporary emergency authorisation under rule 25 of the SRA Authorisation Rules.

Regulation 8: Notification of decisions by the SRA

8.1

When the SRA must notify reasons

(a)

The SRA must notify its reasons in writing when it:

(i): refuses an application;
(ii): grants an application subject to a condition; or
(iii): refuses a permission required under a condition on a body's recognition.

(b)

The reasons must be given to the applicant body and to the individual concerned, when refusing approval of an individual under regulation 5.

8.2

The SRA must give 28 days written notice, with reasons:

(a): to the recognised body concerned, when the SRA decides to impose a condition on the body's recognition, or revoke the body's recognition;
(b): to the body and the individual concerned, when the SRA decides to withdraw an approval granted under regulation 5.

8.3

The SRA may shorten or dispense with the 28 day period under 8.2 in imposing a condition if it is satisfied on reasonable grounds that it is in the public interest to do so.

Regulation 9: Appeals

9.1

Before exercising its right of appeal to the High Court:

(a): under paragraph 2(1)(a) of Schedule 2 to the AJA, against refusal of initial recognition;
(b): under paragraph 2(1)(b) or (c) of that Schedule, against the imposition of a condition; or
(c): under paragraph 2(2) of that Schedule, against refusal by the SRA to approve a step which, under a condition on the body's recognition, requires such prior approval,

a body may invoke the SRA's own appeals procedure.

9.2

A body may appeal to the High Court against the SRA's decision to revoke the body's recognition, but must first invoke the SRA's own appeals procedure.

9.3

A body, and/or the individual concerned, may appeal to the High Court against the SRA's decision:

(a): not to approve the individual under regulation 3; or
(b): to withdraw its approval of the individual under regulation 3,

but must first invoke the SRA's own appeals procedure.

9.4

Deemed refusal

(a): An application for initial recognition under regulation 2 is deemed, for the purpose of any appeal under 9.1(a) above, to be refused on the 90th day after the SRA has received the application and all additional information and documentation required, and duly notified to the applicant on that day, if by the end of that day the SRA has not notified the applicant body of its decision.
(b): An application for approval of an individual under regulation 5 is deemed, for the purpose of any appeal under 9.3(a) above, to be refused on the 90th day after the SRA has received the application and all additional information and documentation required, and duly notified to the applicant on that day, if by the end of that day the SRA has not notified the applicant body, and the individual concerned, of its decision.

9.5

Appeal time limits

(a)

Appeals under the SRA's own appeals procedure must be made within 28 days of notification of the SRA's reasons for its decision, or within 28 days of deemed refusal under 9.4 above.

(b)

Unless otherwise provided in rules of Court or in the relevant decision, an appeal to the High Court must be made:

(i): within the period of 28 days from the date on which the notice of the decision that is subject to appeal is given to the appellant; or
(ii): within a period of 28 days from the date on which the notice of the refusal of an appeal under the SRA's own appeals procedure is given to the appellant,

as appropriate.

9.6

An appeal under the SRA's own appeals procedure under 9.3(a) above shall be treated as an application for the purpose of these regulations.

Part 2: Duration of recognition, renewal date, revocation and expiry

Regulation 10: Duration of recognition and renewal date

10.1: Recognition is renewable yearly and the renewal date is 31 October in each successive year.
10.2: Recognition continues in force unless it is revoked, or unless it expires under regulation 12 or is suspended by the High Court.
10.3: Renewal of recognition commences on the day following the renewal date.

Guidance note

(i): When firms recognised under these regulations are transitioned to be recognised bodies regulated under the SRA Authorisation Rules their recognition will become a lifetime recognition and annual renewal of recognition will not be necessary. Other requirements will apply annually, including rules 8.3 (Payment of periodical fees) and 8.7 (Information requirements) of the SRA Authorisation Rules.

Regulation 11: Revocation of recognition

11.1

The SRA may revoke a body's recognition, if:

(a): recognition was granted as a result of error or fraud;
(b): the body would not be eligible to be recognised if it were at that time applying for initial recognition;
(c): the renewal date has passed and the SRA has not received an application for renewal of recognition and all required fees, information and documentation;
(d): the body has a temporary emergency recognition but has not within the initial 28 day period or any extension of that period commenced a substantive application for recognition;
(e): the body has ceased to practise;
(f): an approved regulator other than the SRA has authorised the body;
(g): the SRA has decided under regulation 2.4 not to renew the body's recognition; or
(h): a relevant insolvency event within the meaning of paragraph 32(1A) of Schedule 2 to the AJA has occurred in relation to the recognised body which has not triggered expiry of recognition under regulation 12,

and the SRA is satisfied that revocation would not present a risk to clients, to the protection of client money or to any investigative process.

11.2

Revocation taking effect

(a): Subject to (b) below, revocation takes effect on expiry of the notice period under regulation 6.2(a) or on such later date as may be stated in the notice.
(b): If an appeal is made before the revocation takes effect, the revocation is suspended pending determination or discontinuance of the appeal, unless in the opinion of the SRA the proceedings on that appeal have been unduly protracted by the appellant or are unlikely to be successful.

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.

Part 3: Name, the register and certificate of recognition

Regulation 13: Name of a recognised body

13.1: A body corporate will be recognised under its corporate name.
13.2: A partnership must elect to have a name under which it is to be recognised.

Regulation 14: The register of recognised bodies

14.1

The SRA must keep a register of recognised bodies, which may be kept in electronic form.

14.2

The register of recognised bodies must contain, for each recognised body:

(a)

the name and number under which the body is recognised;

(b)

any other practising styles used by the body;

(c)

the recognised body's registered office and registered number, if it is an LLP or company;

(d)

the recognised body's principal practising address in England and Wales;

(e)

all the recognised body's other practising addresses;

(f)

whether the recognised body is a partnership, an LLP or a company;

(g)

if the recognised body is a company, whether it is:

(i): a company limited by shares;
(ii): a company limited by guarantee;
(iii): an unlimited company;
(iv): an overseas company registered in England and Wales;
(v): an overseas company registered in Scotland;
(vi): an overseas company registered in Northern Ireland; or
(vii): a societas Europaea;

(h)

a list of the body's managers, and in respect of each manager, whether that manager is:

(i): a lawyer of England and Wales, and if so the nature of his or her qualification;
(ii): an REL, and if so his or her professional title and jurisdiction of qualification;
(iii): an EEL registered with the BSB, and if so his or her professional title and jurisdiction of qualification;
(iv): an EEL based entirely at an office or offices outside England and Wales, and if so his or her professional title and jurisdiction of qualification;
(v): an RFL, and if so his or her professional title and jurisdiction of qualification;
(vi): an individual approved under regulation 5;
(vii): a company, and if so whether it is a recognised body, a European corporate practice or an authorised non-SRA firm;
(viii): an LLP, and if so whether it is a recognised body, a European corporate practice or an authorised non-SRA firm; and
(ix): a partnership with separate legal personality, and if so whether it is a recognised body, a European corporate practice or an authorised non-SRA firm;

(i)

any condition to which the body's recognition is subject; and

(j)

any other reasonable information, necessary for carrying out the SRA's statutory objectives, from time to time prescribed by the SRA.

14.3

Public information

(a): Entries in the register must be available for inspection by any member of the public, except that the SRA may withhold an address in exceptional circumstances where the SRA considers that to do so would be in the public interest.
(b): The date on which, and the circumstances in which, a recognised body's recognition expired or was revoked must be made available to a member of the public on request.

Regulation 15: Certificates of recognition

15.1

When a body is granted initial recognition or its recognition is renewed, the SRA must issue a certificate of recognition.

15.2

Each certificate of recognition must state, in respect of the recognised body:

(a)

the name and number under which the body is recognised;

(b)

its registered office, if it is an LLP or company;

(c)

its principal practising address in England and Wales;

(d)

whether it is a partnership, an LLP or a company; and if it is a company, whether it is:

(i): a company limited by shares;
(ii): a company limited by guarantee;
(iii): an unlimited company;
(iv): an overseas company registered in England and Wales;
(v): an overseas company registered in Scotland;
(vi): an overseas company registered in Northern Ireland; or
(vii): a societas Europaea;

(e)

the date from which recognition is granted or renewed;

(f)

the next renewal date; and

(g)

any condition to which the body's recognition is subject.

Part 4: Interpretation, waivers, reconsideration and notifying third parties

Regulation 16: Interpretation

16.1: All italicised terms are to be interpreted in accordance with Chapter 14 of the SRA Code of Conduct unless otherwise specified.
16.2: In these regulations:

appellate body

means the body with the power, by virtue of an order under section 80(1) of the LSA, to hear and determine appeals against decisions made by the SRA acting as a licensing authority.

associate

has the meaning given in paragraph 5 to Schedule 13 of the LSA, namely:

(i)

"associate", in relation to a person ("A") and

(A): a shareholding in a body ("S"), or
(B): an entitlement to exercise or control the exercise of voting power in a body ("V"),

means a person listed in sub-paragraph (ii).

(ii)

The persons are

(A)

the spouse or civil partner of A,

(B)

a child or stepchild of A (if under 18),

(C)

the trustee of any settlement under which A has a life interest in possession (in Scotland a life interest),

(D)

an undertaking of which A is a director,

(E)

an employee of A,

(F)

a partner of A (except, where S or V is a partnership in which A is a partner, another partner in S or V),

(G)

if A is an undertaking

(I): a director of A,
(II): a subsidiary undertaking of A, or
(III): a director or employee of such a subsidiary undertaking,

(H)

if A has with any other person an agreement or arrangement with respect to the acquisition, holding or disposal of shares or other interests in S or V (whether or not they are interests within the meaning of section 72(3) of the LSA), that other person, or

(I)

if A has with any other person an agreement or arrangement under which they undertake to act together in exercising their voting power in relation to S or V, that person.

authorised person(s)

means a person who is authorised by the SRA or another approved regulator to carry on a legal activity and for the purposes of the SRA Authorisation Rules, the SRA Practice Framework Rules and the SRA Recognised Bodies Regulations 2011 includes a solicitor, a sole practitioner, an REL, an EEL, an RFL, an authorised body, an authorised non-SRA firm and a European corporate practice and the terms "authorised individual" and "non-authorised person" shall be construed accordingly;

BSB

means the Bar Standards Board;

compliance officer

is a reference to a body's COLP or its COFA;

Court of Protection deputy

includes a deputy who was appointed by the Court of Protection as a receiver under the Mental Health Act 1983 before the commencement date of the Mental Capacity Act 2005, and also includes equivalents in other Establishment Directive states;

date of notification

the date of any notification or notice given under these regulations is deemed to be:

(i): the date on which the communication is delivered to or left at the recipient's address or is sent electronically to the recipient's e-mail or fax address;
(ii): if the recipient is practising, seven days after the communication has been sent by post or document exchange to the recipient's last notified practising address; or
(iii): if the recipient is not practising, seven days after the communication has been sent by post or document exchange to the recipient's last notified contact address;

disqualified

refers to a person who has been disqualified under section 99 of the LSA by the SRA or by any other approved regulator;

EEL

means exempt European lawyer, namely, a member of an Establishment Directive profession:

(i): registered with the BSB; or
(ii): based entirely at an office or offices outside England and Wales,

who is not a lawyer of England and Wales (whether entitled to practise as such or not);

European corporate practice

means a lawyers' practice which is a body incorporated in an Establishment Directive state, or a partnership with separate legal identity formed under the law of an Establishment Directive state:

(i): which has an office in an Establishment Directive state but does not have an office in England and Wales;
(ii): whose ultimate beneficial owners include at least one individual who is not a lawyer of England and Wales but is, and is entitled to practise as, a lawyer of an Establishment Directive profession; and
(iii): whose managers include at least one such individual, or at least one body corporate whose managers include at least one such individual;

HOFA

means a Head of Finance and Administration within the meaning of paragraph 13(2) of Schedule 11 to the LSA;

HOLP

means a Head of Legal Practice within the meaning of paragraph 11(2) of Schedule 11 to the LSA;

interest holders

means a person who has an interest or an indirect interest, or holds a material interest, in a body (and "indirect interest" and "interest" have the same meaning as in the LSA), and references to "holds an interest" shall be construed accordingly;

legally qualified

means any of the following:

(i): a lawyer;
(ii): a recognised body;
(iii): an authorised non-SRA firm of which all the managers and interest holders are lawyers save that where another body ("A") is a manager of or has an interest in the firm, non-authorised persons are entitled to exercise, or control the exercise of, less than 10% of the voting rights in A;
(iv): European corporate practice of which all the managers and interest holders are lawyers;

and references to a "legally qualified body" shall be construed accordingly;

licensing authority

means an approved regulator which is designated as a licensing authority under Part 1 of Schedule 10 to the LSA, and whose licensing rules have been approved for the purposes of the LSA;

material interest

has the meaning given to it in Schedule 13 to the LSA; and a person holds a "material interest" in a body ("B"), if that person:

(i): holds at least 10% of the shares in B;
(ii): is able to exercise significant influence over the management of B by virtue of the person's shareholding in B;
(iii): holds at least 10% of the shares in a parent undertaking ("P") of B;
(iv): is able to exercise significant influence over the management of P by virtue of the person's shareholding in P;
(v): is entitled to exercise, or control the exercise of, voting power in B which, if it consists of voting rights, constitutes at least 10% of the voting rights in B;
(vi): is able to exercise significant influence over the management of B by virtue of the person's entitlement to exercise, or control the exercise of, voting rights in B;
(vii): is entitled to exercise, or control the exercise of, voting power in P which, if it consists of voting rights, constitutes at least 10% of the voting rights in P; or
(viii): is able to exercise significant influence over the management of P by virtue of the person's entitlement to exercise, or control the exercise of, voting rights in P;

and for the purpose of this definition, "person" means (1) the person, (2) any of the person's associates, or (3) the person and any of the person's associates taken together, and "parent undertaking" and "voting power" are to be construed in accordance with paragraphs 3 and 5 of Schedule 13 to the LSA;

person who lacks capacity under Part 1 of the Mental Capacity Act 2005

references to a person who lacks capacity under Part 1 of the Mental Capacity Act 2005 include a "patient" as defined by section 94 of the Mental Health Act 1983 and a person made the subject of emergency powers under that Act, and equivalents in other Establishment Directive states;

practising address

in relation to an authorised body means an address from which the body provides services consisting of or including the carrying on of activities which it is authorised to carry on;

prescribed

means prescribed by the SRA from time to time;

principal

means a sole practitioner or a partner in a partnership;

SA

means the Solicitors Act 1974;

shareowner

means:

(i): a member of a company with a share capital, who owns a share in the body; or
(ii): a person who is not a member of a company with a share capital, but owns a share in the body, which is held by a member as nominee;

SRA Code of Conduct

means the SRA Code of Conduct 2011;

SRA Practice Framework Rules

means the SRA Practice Framework Rules 2011;

SRA Practising Regulations

means the SRA Practising Regulations 2011;

the Tribunal

means the Solicitors Disciplinary Tribunal which is an independent statutory tribunal constituted under section 46 of the SA but references to the Tribunal do not refer to any function performed by the Solicitors Disciplinary Tribunal as an appellate body; and

trustee

includes a personal representative (i.e. an executor or an administrator), and "trust" includes the duties of a personal representative.

Regulation 17: Waivers

17.1: In any particular case or cases the SRA shall have power to waive in writing the provisions of these regulations for a particular purpose or purposes expressed in such waiver, and to revoke such waiver.

Guidance note

(i): Waivers granted in respect of these regulations will expire on the repeal of the regulations on 31 March 2012. Firms with the benefit of such waivers should consider whether they need to apply for a new waiver of the equivalent provisions of the SRA Authorisation Rules and, if so, should contact the Professional Ethics Guidance Team.

Regulation 18: Reconsideration

18.1

The SRA may reconsider or rescind a decision made under these regulations when it appears that the decision maker:

(a): was not provided with material evidence that was available to the SRA;
(b): was materially misled;
(c): failed to take proper account of material facts or evidence;
(d): took into account immaterial facts or evidence;
(e): made a material error of law;
(f): made a decision which was otherwise irrational or procedurally unfair;
(g): made a decision which was otherwise ultra vires; or
(h): failed to give sufficient reasons.

18.2

A decision may be reconsidered under 18.1 only on the initiative of the SRA.

18.3

The SRA, when considering the exercise of its powers under this regulation, may also give directions:

(a): for further investigations to be undertaken;
(b): for further information or explanation to be obtained; and
(c): for the reconsideration to be undertaken by the original decision maker or by a different decision maker or panel.

Regulation 19: Notifying third parties of decisions

19.1

The SRA may, if it considers it in the public interest to do so, notify any or all of the following persons of a decision made under these regulations:

(a): a recognised body, licensed body or authorised non-SRA firm of which the body or individual concerned is a manager or has an ownership interest;
(b): a recognised sole practitioner, recognised body, licensed body or authorised non-SRA firm of which the individual concerned is an employee;
(c): any approved regulator;
(d): the Legal Services Board;
(e): the Legal Ombudsman;
(f): the regulatory body for any profession of which the individual concerned is a member or which regulates the body concerned;
(g): any law enforcement agency.

Regulation 20: Transitional provisions

20.1: In these regulations references to licensed bodies shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA and all definitions shall be construed accordingly.
20.2: In these regulations references to compliance officers shall have no effect until such time as the Society is designated as a licensing authority under Part 1 of Schedule 10 to the LSA.