SRA Handbook

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

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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.