NS1 – Notice of succession
Last updated 9 November 2011
The historic turnover of a firm is used for the purposes of determining the firm's renewals fee, this fee is based on the figure that has been submitted to the SRA as part of the renewal process.
You should submit a notice of succession if
- your firm has succeeded to the whole or part of the practice of one or more firms and/or
- your firm has split or ceded part of the practice to another firm and wishes this change to be considered by the SRA when determining the firm's next renewal fee.
This is to enable the SRA to ensure that the turnover figure on which your renewal fee is based reflects the impact of the change.
The notice of succession must identify all firms affected by the succession and provide details of any resulting apportionment of the turnover figures for those firms.
If you are notifying us of successor turnover figures following a succession that took place between 1 November 2010 and 31 October 2011:
If you are notifying us of successor turnover figures following a succession that took place on or after 1 November 2011:
NS1 2011-2012 notes
Introduction
About the Notice of Succession
The SRA Practising Regulations 2011 and the SRA Recognised Bodies Regulations
2011 require firms affected by a change, for example, an acquisition, merger or split,
to provide the Solicitors Regulation Authority (SRA) with a successor turnover figure
which is calculated by apportioning the historic turnover figures for each of the firms
affected by the change (i.e. their total turnover figure).
A Notice of Succession is the prescribed form to notify the SRA of a successor
turnover figure for each of the Affected Firms where:
- A firm has succeeded to the whole or part of the practice of one or
more firms, and/or
- A firm has split or ceded part of the practice to another firm and
wishes this change to be considered by the SRA when determining
the firm's next fee.
Where all Affected Firms agree on the apportionment of 100% of the total turnover
figure, the SRA will accept the successor turnover figures provided in the Notice of
Succession.
Where the Affected Firms are unable to agree the apportionment of 100% of the total
turnover figure on which they are all agreed, the SRA will apportion the turnover
figures for the purposes of determining all of the Affected Firms' periodical fees for
the following year. The SRA will determine this apportionment based on the
information available and its decision will be final. The SRA may also charge a fee of
£250 where the Affected Firms are unable to reach an agreement.
It is important to note that identification of a successor firm within a Notice of
Succession should not be taken as a declaration that any firm is a successor
practice as defined in Appendix 4 of the SRA Indemnity Insurance Rules.
All references (unless otherwise stated) mean the following:
- "the Code" means the SRA Code of Conduct 2011;
- "the Recognised Bodies Regulations" means the SRA Recognised
Bodies Regulations 2011;
- "the Practising Regulations" means the SRA Practising Regulations
2011.
The rules and regulations are published at www.sra.org.uk/handbook.
How to use the form
This form should be completed and signed by all firms affected by a succession, for
example an acquisition, merger or split.
We would encourage you to complete this form electronically as certain sections of
the form will pre-populate as you enter information. This is to help you ensure that
100% of the total turnover figure has been apportioned before submitting the Notice
of Succession.
Navigate through the boxes by using the tab key. Once you have completed the
information, you will need to
- print, and
- return the signed Notice of Succession to the address provided below.
Where a firm affected by the succession is unwilling to share their historic turnover
figure with the other Affected Firms, they may complete a confidential acceptance of
the Notice of Succession. This is to provide the SRA with confirmation of their
successor turnover figure and to evidence their agreement with the apportionment of
the total turnover figure set out in the Notice of Succession. This acceptance forms
part of the Notice of Succession and must be consistent with the associated
Notice of Succession. You should contact us to obtain a confidential acceptance
form if this is needed.
Please answer all questions and complete all the relevant boxes. You may find it
helpful to refer to the glossary at the end of these notes.
If you are providing any additional information in separate sheets, please provide a
list of enclosures and mark each document clearly with the section of the form to
which it relates.
The declaration must be signed by the relevant individual for each Affected Firm
before submitting the form.
Please note that we will require a completed form. This means a form that
- has been completed by all firms affected by the succession,
- shows that 100% of the historic turnover figures for each of the Affected Firms
has been apportioned, and
- has been signed by a nominated contact from each of the Affected Firms.
This should be a solicitor or REL manager or the recognised sole practitioner.
Where a Notice of Succession is submitted that has not been signed by all Affected
Firms, it will be treated as an application for the SRA to apportion the turnover figures
for the purposes of determining the periodical fees for the following year. The SRA
will determine this apportionment based on the information available and its decision
will be final. In this circumstance, the SRA may charge a fee of £250.
How to contact us
Contact Centre
If you need any assistance completing this form, please contact us on
Lines are open 09.00–17.00, Monday to Friday. Calls may be monitored/recorded for
training purposes.
Useful information
Who needs to submit a Notice of Succession?
- A firm which has succeeded to the whole or a part of the practice of one or
more firms; and/or
- a firm which has split or ceded part of the practice to another firm and wishes
this change to be considered by the SRA when determining its next periodical
fee.
When should a Notice of Succession be submitted?
Regulation 3 of the Recognised Bodies Regulations and regulation 5 of the Practising
Regulations requires a Notice of Succession to be submitted to the SRA within 28
days of the change taking place.
Who should be included on the form?
The Notice of Succession must identify all firms affected by the succession and must
provide details of the resulting apportionment of the turnover figures for those
Affected Firms.
Is there a fee?
There is no fee for submitting the Notice of Succession. Where the Notice of
Succession does not include the agreement of all Affected Firms to the
apportionment of turnover, the Notice shall be treated as an application for the SRA
to determine the relevant Successor Turnover Figure. In this circumstance, the SRA
may charge a fee of £250.
Where do I return the completed form?
Please send your form to:
Solicitors Regulation Authority
Operations Unit
Ipsley Court
Berrington Close
Redditch
B98 0TD
or DX 19114 Redditch
Alternatively, you can scan and email the Notice of Succession to operations@sra.org.uk.
Where can I learn more about the fairer fee policy?
If you would like to know more about the approach to charging firms please refer www.sra.org.uk/fees where you can find our three consultations on "Moving to a
fairer fee policy", helpful FAQs and an online calculator which you can use to help
calculate your own fees.
Section 1 – Summary Information
Date of Succession
Provide the date of the change which has lead to the submission of this Notice of
Succession, e.g. the date the merger or split took effect.
Summary of the succession that has taken place
Provide a high level explanation of what change has taken place, for example,
whether there has been a merger, takeover, acquisition, split or other event which
has lead to the submission of the Notice of Succession. It is important that you
provide details of all the firms involved.
Please use a separate sheet if you need to provide additional information.
Have all parties agreed on the information in this form?
Under the Recognised Bodies Regulations and the Practising Regulations the firm
delivering the Notice of Succession must seek the agreement of all the Affected
Firms to the contents of the Notice of Succession.
To indicate whether all parties have agreed, please select either yes or no by clicking
the appropriate box.
Where a Notice of Succession is delivered to the SRA which has not been agreed by
all Affected Firms, the firm delivering the Notice of Succession will be treated as
having made an application for the SRA to apportion the turnover figures of the
Affected Firms for the purposes of determining the periodical fees for the following
year.
The SRA will determine this apportionment based on the information available and its
decision will be final. We will contact any Affected Firms identified in the Notice of
Succession who have not agreed with the contents. Please note we may require the
production of additional information and a fee of £250.
Where agreement has not been reached by all Affected Firms, what
action has been taken to seek an agreement?
Please provide details of all steps taken to try to reach an agreement. Please state
which of the Affected Firms have agreed to the apportionment and which have not.
Please also give the reasons why agreement has not been reached.
Please use a separate sheet if you need to provide additional information.
Under the Recognised Bodies Regulations and the Practising Regulations the SRA
will contact any Affected Firms identified in the Notice of Succession who have not
agreed with the contents asking them to provide an explanation why they do not
agree with the Notice. Please note that we will contact the other Affected Firms if
appropriate. Under Chapter 10 of the Code all firms must provide the SRA with
information to enable the SRA to decide upon any application you make.
Section 2 – Details of Affected Firms
Name of firm
The full name of the Affected Firm should appear here. This may not be the only
name under which the firm will trade, but is the registered name which appears on
the SRA's public register.
Firm SRA ID number
This is the firm's reference number which identifies the firm and appears on the
SRA's public register. If you are applying to be a new recognised body or recognised
sole practitioner following the succession then you may not have been allocated a
Firm SRA ID number and you should leave this box blank. Please quote your SRA
number in any correspondence with us.
Head or main office address
Please provide the main practice address of your head office.
Notice of Succession Contact
To help us ensure effective and appropriate communication during this process,
please provide the name and contact details of the person you wish to be the Notice
of Succession contact. This should be a solicitor or REL who is a manager or the
recognised sole practitioner of the firm. All communication regarding the Notice of
Succession will be with this person.
Is the firm continuing to practise, closing or a new firm?
Please select one of the options to indicate if the firm is continuing to practise, is
closing or if it is applying for new firm recognition.
Turnover figure
Provide the turnover figure in the following format.
Please provide the turnover figure that you last provided to the SRA and which
complies with the SRA's definition of turnover, if however the figure you originally
provided was an estimate and you now have a figure based on closed accounts
please provide an updated figure.
If you wish to check the figure that you last provided to the SRA, please email operations@sra.org.uk, including your Firm's SRA ID number and the reason for your
request. Please note that we will only confirm this information to a solicitor or REL
who is a manager or the recognised sole practitioner of the firm.
We acknowledge that information about firms' fees is commercially sensitive. We will
use it for regulatory purposes only.
Where a firm affected by the succession is unwilling to share their historic turnover
figure with the other Affected Firms, they may complete a confidential acceptance of
the Notice of Succession. This is to provide the SRA with confirmation of their
successor turnover figure and to evidence their agreement with the apportionment of
the total turnover figure set out in the Notice of Succession. This acceptance forms
part of the Notice of Succession and must be consistent with the associated
Notice of Succession. You should Contact Us to obtain a confidential acceptance
form if this is needed.
If you are applying to be a new recognised body or recognised sole
practitioner following the succession then the turnover figure in section 2
should be £0 and you should leave the accounting period date blank.
Corresponding accounting period prior to 1 November 2011
Please provide the exact dates of the accounting period to which the turnover figure
relates.
The turnover figure should, wherever possible, be for the last complete (12 months)
accounting period prior to 1 November 2011 (e.g. to 31 March 2011). The latest
acceptable annual accounting period end date will be 31 October 2011.
Please confirm what the turnover figure you have provided is based on by selecting
just one of the following tick boxes.
Definition of turnover
The following paragraphs describe how the turnover figure should be calculated:
- Turnover figure means a firm's total gross fees arising from work undertaken from
offices in England and Wales.
- Gross fees includes: all professional fees of the firm including
remuneration, retained commission, and income of any sort whatsoever of
the firm (including notarial fees). Work in progress should be included.
- Gross fees do not include: interest, reimbursement of disbursements,
VAT, remuneration from non-private practice source, dividends, rents, and
investment profit.
- The turnover figures that will be used when billing firms in October 2012 will be
based on closed accounts, audited where possible.
Closed accounts are defined, in order of preference, as:
- an audited set of financial statements
- an unaudited set of financial statements signed off by an
accountant
- a submitted tax return for the year.
- Bad debt should be handled under normal accounting procedures. Where it has
been allowed for in the turnover figure for a firm's last closed accounting period
prior to 1 November 2011, that is acceptable. If a bad debt has been discovered
after closing the firm's accounts, then the turnover figure cannot be re-adjusted.
Those adjustments could potentially be accounted for in the following year's
closed accounts.
- The turnover figure should, wherever possible, be for the last complete (12
months) accounting period prior to the 1 November 2011 (e.g. 31 March 2011).
The latest acceptable annual accounting period end date is 31 October 2011.
- The turnover figure should be an exact figure wherever possible. A figure
rounded to the nearest £1,000 will be acceptable only if more detail is
unavailable.
- Those firms who do not have closed accounts which ended within the period from
1 November 2010 to 31 October 2011, should provide the SRA with an estimate
of the turnover figure as well as the previous year's turnover figure based on
accounts which have been closed.
- The turnover figure must be for a 12 month period.
- (a) For a brand new firm (i.e. not a successor firm nor one resulting
from change in status), an estimate for the first 12 months of practice
(irrespective of whether this is after 31 October 2011) will be
accepted; the basis upon which the firm has made the estimate should
be provided to the SRA.
- (b) If a firm has changed its annual accounting period, its latest closed
accounting period prior to the 1 November 2011 will be shorter or
longer than 12 months. The following approach should be used by the
firm, providing an explanation of how they have derived their turnover
figure:
- Preferably, provide the turnover for the 12 month period immediately
preceding the new accounting period end date (as long as prior to 1
November 2011)
- Alternatively, if this is not possible then take the last closed accounts
period prior to the 1 November 2011 and scale it appropriately (e.g. if the
last closed accounting period was for six months then it should be
doubled; if the last closed accounting period was for 15 months, then it
should be divided by 15 and then multiplied by 12).
- If a firm has a change in status (e.g. partnership to LLP, sole practitioner to
partnership), then at renewal it should respond as if there were no change in
status.
If the firm is a "new" firm, has a new recognition application been
submitted?
If the Affected Firm is a new recognised body or recognised sole practitioner, they
must submit an application for initial recognition. Guidance on the appropriate
application form and fee is available on our website at www.sra.org.uk/renewal.
Please note, we will be unable to apportion the historic turnover figures until we have
received an application for initial recognition from all firms applying to be a new
recognised body or recognised sole practitioner.
Please also provide the date the application form was submitted.
If the firm is closing, please submit notification of the firm closure.
If the Affected Firm is closing, we will require a separate written notification of the firm
closure which provides the following information:
- The date the firm has closed,
- the contact details for any firm to which any live files have been
transferred and/or where closed client files are to be stored, and
- the date you ceased to hold client monies/ceased to operate a client's
own account as signatory.
This should be returned to
Solicitors Regulation Authority
Operations Unit
Ipsley Court
Berrington Close
Redditch
B98 0TD
or DX 19114 Redditch
Alternatively, you can email operations@sra.org.uk.
If you require any further advice regarding your responsibilities on closing down your
practice, please see our guidance at www.sra.org.uk/guidance.
Section 3 – Turnover Allocation
Use this table to apportion the total turnover figure for all of the Affected Firms. The
grey boxes will have been pre-populated with the information you provided in section
2 of the form.
The turnover figure provided earlier in the form must match the turnover figure that
you last provided to the SRA and which complies with the SRA's definition of
turnover, if however the figure you originally provided was an estimate and you now
have a figure based on closed accounts please provide an updated figure.
If you wish to check the figure that you last provided to the SRA, please email operations@sra.org.uk, including your Firm's SRA ID number and the reason for your
request. Please note that we will only confirm this information to a solicitor or REL
who is a manager or the recognised sole practitioner of the firm.
Enter the successor turnover for each Affected Firm in the white boxes. This should
be the total turnover allocated to the firm after the succession. The examples
scenarios below demonstrate how this section should be completed.
| Firm |
Firm SRA ID |
Turnover figure |
Successor Turnover |
| [Closing firm] |
123456 |
£1,000,000 |
£0 |
| [New firm] |
234567 |
£0 |
£500,000 |
| [New firm] |
345678 |
£0 |
£500,000 |
| Total |
£1,000,000 |
£1,000,000 |
| Firm |
Firm SRA ID |
Turnover figure |
Successor Turnover |
| [Continuing firm ] |
|
£1,000,000 |
£500,000 |
| [New firm] |
|
£0 |
£500,000 |
| Total |
£1,000,000 |
£1,000,000 |
| Firm |
Firm SRA ID |
Turnover figure |
Successor Turnover |
| [Continuing firm] |
|
£1,000,000 |
£500,000 |
| [Continuing firm] |
|
£1,000,000 |
£1,500,000 |
| Total |
£2,000,000 |
£2,000,000 |
Please note 100% of the total turnover figure must be apportioned within the
total successor turnover.
To help you check if 100% of the total turnover figure has been apportioned a green
confirmation message will appear below the turnover allocation table.
Where 100% of the total turnover figure has not been apportioned a red confirmation
message will appear below the turnover allocation table.
In a case where all Affected Firms agree on the apportionment of 100% of the
turnover figures, the SRA will accept the successor turnover figures and your next
periodical fee will be based upon these successor turnover figures (see our "Moving
towards a fairer fee policy" consultations www.sra.org.uk/fees).
In the case where all Affected Firms are unable to agree the apportionment of 100%
of the total turnover figure, the SRA will apportion the total turnover figure for the
purposes of determining your next periodic fee. The SRA will determine this
apportionment based on the information available and its decision will be final. In this
circumstance, the SRA may request further information and charge a fee of £250.
Successor Turnover
Successor turnover is relevant where firms have changed through, for example, an
acquisition, merger or split. Certain firms affected are required to submit a Notice of
Succession to the SRA with an agreed apportionment of turnover among the affected
firms. As guidance successor turnover shall be calculated based on the Turnover
Figures for each of the Affected Firms.
If a firm has succeeded to the whole or a part of one or more firms (e.g. through
merger or acquisition), successor turnover will be calculated by combining the
appropriate proportion of the Turnover Figure for each of the Affected Firms which
has become part of the successor practice:
- In a simple merger between firms A and B, combine the Turnover Figures for
each firm.
- In a merger of one firm (firm A) with part of another firm (e.g. one third of firm
B) then firm A should add the corresponding proportion of firm B's Turnover
Figure to its Turnover Figure (e.g. firm A's Turnover Figure + third of firm B's
Turnover Figure).
For a firm which has split or ceded part of their practice to another firm and wishes
this change to be reflected in a successor turnover figure, the successor turnover
figure will be a proportion of the Turnover Figure, as long as it is clear how the
Turnover Figure for such a firm is to be distributed between the successor firms.
100% of the Turnover Figure must be accounted for between the successor firms.
For example:
- In a merger of firm A with one third of firm B then firm B's successor turnover figure will be two thirds of its Turnover Figure, firm A's will be its Turnover Figure plus one third of B's Turnover Figure.
- Where firm A and one third of firm B become new firm C firm A's turnover will be £0 (closed) and B's turnover will be two thirds of its Turnover Figure. Firm C's successor turnover figures will be the combination of A's turnover figure and one third of firm B's.
Section 4 – Firm Declaration
This section will be pre-populated with the information you provided in section 2 of
the form, each declaration will be identified by the Affected Firm's name.
Who may sign?
The form must be signed by a solicitor or an REL who is a manager or the
recognised sole practitioner of the firm. A manager must be authorised by all other
managers of the firm to sign this form.
Please also consider the following when completing this section:
- If the form is not signed by any Affected Firm, the firm delivering the
Notice of Succession will be treated as having made an application for
the SRA to apportion the turnover figures of the Affected Firms for the
purpose of determining the periodical fee.
- Before apportioning the turnover figures, we will contact any Affected
Firm identified in the Notice of Succession who has not agreed with
the contents. Please note we may require of additional information
and charge a fee of £250.
Please also clearly and accurately state your full name and SRA number, and
date the declaration.
Please note, knowingly or recklessly giving the SRA information which is false or
misleading, or failure to inform the SRA of materially significant information of which
the firm (or the managers) are aware, may lead to disciplinary action by the SRA or
revocation of the firm's recognition (which includes authorisation to practise as a
recognised sole practitioner).
The SRA reserves the right to carry out or to request you to carry out checks in
relation to the firm's or managers' compliance with the SRA's rules and relevant legal
requirements.
Can we appeal the SRA's decision?
Responses to "Moving toward a fairer fee policy": Second consultation (CP21)
indicated overwhelming support for firms working out for themselves how turnover
should be apportioned between successor firms. Regulation 3.5 of the Recognised
Bodies Regulations and 5.5 of the Practising Regulations state the firm delivering a
Notice of Succession under these regulations must seek the agreement of all
Affected Firms to the content of the Notice of Succession.
Where all successor firms are unable to agree the apportionment of 100% of the
turnover figures, the SRA will apportion the turnover figures for the purposes of
determining renewal fees. The SRA will determine this apportionment based on the
information available and its decision will be final. Firms will not be able to appeal.
Glossary of terms
In these notes:
- Affected Firm
- A firm affected by a succession, for example, a merger, takeover, acquisition, split or
other events.
- Head office
- The "head office" is the office we have in our records as the main address for your
firm or organisation.
- Firm
- A recognised sole practitioner or a recognised body.
- Firm recognition
- Recognised body recognition and authorisation to practise as a recognised sole
practitioner.
- Manager
-
- (a) a partner in a partnership;
- (b) a member of an LLP; or
- (c) a director of a company;
- Recognised body
- A partnership, company or LLP for the time being recognised by the Solicitors
Regulation Authority under section 9 of the Administration of Justice Act 1985 and
the Recognised Bodies Regulations;
- Recognised Bodies Regulations
- The SRA Recognised Bodies Regulations 2011;
- Recognised Sole Practitioner
- A solicitor or REL authorised by the Solicitors Regulation Authority under section 18
of the Solicitors Act 1974 to practise as a sole practitioner;
- Registered European lawyer (REL)
- An individual registered with the Solicitors Regulation Authority under regulation 17 of
the Establishment Directive Regulations.
- Successor Firm
- For the purposes of calculating the fees, a recognised body or recognised sole
practitioner which after 31 October 2011 succeeds to the whole or any part of any
recognised body or recognised sole practitioner, for value or otherwise, in any of the
following cases:
- case (I):
a recognised body or recognised sole practitioner which acquires the whole or a part
of one or more recognised bodies or recognised sole practitioners;
- case (II):
a recognised body or recognised sole practitioner resulting from the merger between
the whole or part of two or more recognised bodies or recognised sole practitioners;
- case (III):
a recognised body or recognised sole practitioner remaining after it has split or ceded
part of its practice to another recognised body or recognised sole practitioner;
- Succeeded
- Includes any taking over of the whole or any part of a recognised body or recognised
sole practitioner, for value or otherwise.
- Successor Turnover Figure
- As set out in section 3.
- Turnover Figure
- As set out in section 2.
Please use www.sra.org.uk/ns1 to link to this page.