SRA Authorisation of Firms Rules
These provisions set out the SRA's arrangements for the authorisation of firms. This includes recognised bodies, licensed bodies and recognised sole practices.
The rules set out our authorisation and application requirements, the effect of authorisation by the SRA on the legal activities such bodies may provide, and how and when we may restrict or limit a firm's authorisation or bring it to an end.
If you are unsure whether you are eligible for authorisation, or need to be authorised, please see our guidance.
This introduction does not form part of the SRA Authorisation of Firms Rules.
Part 1: Eligibility
- You will be eligible to apply for authorisation:
- as a licensed body, if you are a licensable body and have at least one manager that is an authorised person (other than a licensed body);
- as a recognised body, if you are a legal services body in which all of the managers and interest holders are legally qualified; or
- as a recognised sole practice, if you are a solicitor or an REL who is the sole principal in a practice,
- The eligibility requirements in rule 1.1 are subject to the transitional arrangements set out in annex 1.
- An authorised body must:
Part 2: Determination of authorisation applications, duration and validity
- The SRA may grant an application for authorisation in relation to one or more reserved legal activity.
- The SRA will refuse an application for authorisation if it is not satisfied that, if authorisation is granted:
- the applicant's managers, interest holders or management and governance arrangements are suitable to operate or control a business providing regulated legal services;
- the applicant will comply with the SRA's requirements and regulatory arrangements,
- In reaching a decision on the application, the SRA may take into account any person that the applicant, manager, employee or interest holder is related to, affiliated with, or acts together with that it has reason to believe may have an influence over the way in which the applicant, manager, employee or interest holder will exercise their role.
- The SRA may at any time, whether on grant of an application for authorisation or otherwise, impose such conditions on a body's authorisation (whether indefinite or for a specified period), where it considers it appropriate in the public interest to do so and in accordance with rules 3.2 and 3.3.
- The SRA may impose conditions under rule 3.1 if it is satisfied that the authorised body, or a manager, compliance officer, employee, owner, or interest holder of the authorised body:
- is unsuitable to undertake certain activities or engage in certain business or practising arrangements;
- is putting or is likely to put at risk the interests of clients, third parties or the public;
- will not comply with the SRA's regulatory arrangements, or requires monitoring of compliance with the SRA's regulatory arrangements; or
- should take specified steps conducive to the regulatory objectives.
- The conditions imposed by the SRA under rule 3.1 may:
- specify certain requirements that must be met or steps that must be taken;
- restrict the carrying on of particular activities or holding of particular roles; or
- prohibit the taking of specified steps without its approval.
- A body's authorisation takes effect from the date the certificate of authorisation is issued to it by the SRA.
- A body's authorisation shall cease to have effect:
- The SRA may revoke or suspend a body's authorisation, if:
- it is satisfied that the authorisation was granted as a result of error, misleading or inaccurate information, or fraud;
- the body is or becomes ineligible to be authorised, or the grounds for refusal of an application under rule 2.2 are met;
- the body has failed to provide any information the SRA has reasonably requested;
- the body has failed to pay any prescribed fee to the SRA;
- the body makes an application to the SRA for its authorisation to be revoked, but the SRA may refuse the application if the applicant is subject to any proceedings, investigation or consideration of their conduct or practice by the SRA or the Tribunal;
- the body has failed to comply with any obligations under the SRA's regulatory arrangements;
- the body, or an owner, interest holder, manager or employee of the body fails to comply with any duty imposed on them by sections 90 or 176 of the LSA;
- a relevant insolvency event has occurred in relation to the body, or the sole principal is made the subject of bankruptcy proceedings or makes a proposal for an individual voluntary arrangement;
- the SRA has decided to exercise its powers of intervention in relation to the body or a solicitor's practice within the body; or
- for any other reason, it considers it to be in the public interest to do so.
- In the case of a licensed body, the SRA may revoke or suspend the body's authorisation:
- as a result of a person who holds an interest in the licensed body taking a step in circumstances where that constitutes an offence under paragraph 24(1) of Schedule 13 to the LSA (whether or not the person is charged with or convicted of an offence under that paragraph);
- where such a person is in breach of conditions imposed under paragraphs 17, 28 or 33 of that Schedule; or
- where a person's holding of an interest in the licensed body is subject to an objection by the SRA under paragraph 31 or 36 of that Schedule.
- The SRA must not revoke or suspend a body's authorisation other than under rule 4.3(e) unless it has first given the body no less than 28 days' notice of its intention to revoke or suspend the authorisation, inviting representations regarding the issues giving rise to the proposed revocation or suspension.
Part 3: Effect of authorisation and conditions of practice
- If you are a recognised body or a recognised sole practice authorised by the SRA you are entitled to carry on:
- If you are a licensed body you are entitled to carry on the activities set out in rule 5.1, in accordance with the terms of your licence.
- An authorised body may only carry on a reserved legal activity through a person who is entitled to do so.
General conditions of practice
- If you are a recognised body or recognised sole practice, your business may consist only of the provision of:
- professional services of the sort provided by individuals practising as solicitors and/or lawyers of other jurisdictions; and
- the services set out in annex 2 (whether or not they are also included in paragraph (a)),
- An authorised body must at all times have an individual who is designated as its COLP and an individual who is designated as its COFA, and whose designations the SRA has approved.
- Subject to rule 8.3, an individual who is designated under rule 8.1 must:
- An authorised body is not required to comply with rule 8.2(a) where an individual who is designated under rule 8.1:
- Subject to rules 9.2 and 9.3, an authorised body must ensure that the SRA has approved any manager or owner of the authorised body under Part 4.
- A sole principal whose practice has been authorised as a recognised sole practice is not required to be approved separately as a manager of that practice.
- If the SRA is satisfied that a manager of an authorised body is not involved in any of the following:
- the SRA may decide that the authorised body is not required to comply with rule 9.1 in respect of that manager.
- An authorised body must have at least one manager or employee, or must procure the services of an individual, who:
- An authorised body must not employ or remunerate, or permit to be a manager, owner or interest holder of the body, a person:
- who is subject to an order under section 43 of the SA, without the SRA's written permission;
- whose name has been struck off the roll, or who is suspended from practising as a solicitor, without the SRA's written permission;
- in respect of whom there is a direction in force under section 47(2)(g) of the SA, without the SRA's written permission; or
- who has been disqualified from the relevant role.
Part 4: Approval of role holders
- Subject to rules 13.2 to 13.4, the SRA may approve a person's designation as a COLP or COFA or to be a manager or owner of an authorised body if it is satisfied that the individual is fit and proper to undertake the role, in accordance with the SRA Assessment of Character and Suitability Rules.
- The SRA will deem a person to be fit and proper to be a manager or owner of an authorised body if the person is:
- a solicitor, an REL, RFL or an authorised body; or
- a person who has previously been approved by the SRA under rule 13.1 and is:
- A person who meets the conditions under rule 13.2, shall be deemed to be approved to be designated as a manager or owner of any authorised body.
- An authorised body must notify the SRA promptly in the prescribed form of the designation as a manager or owner of that body of a person who has been deemed to be approved under rule 13.3.
- The SRA will deem an individual to be fit and proper to be a compliance officer of an authorised body if:
- that individual is a lawyer and a manager of the authorised body;
- the authorised body has an annual turnover of no more than £600,000;
- they are not a compliance officer of any other authorised body; and
- they are not subject to a regulatory or disciplinary investigation, or adverse finding or decision of the SRA, the Tribunal or another regulatory body.
- An authorised body must notify the SRA promptly, in the prescribed form, of the identity of a compliance officer whose fitness and propriety has been deemed under rule 13.5, and the SRA shall approve their designation to undertake the role in that body accordingly.
- Approval of a person's designation under rule 13.1 or 13.6:
- takes effect from the date of the decision unless otherwise stated;
- remains effective only if the person takes up the designated role within the period specified in the notice of approval, or the period of one year if no period is specified;
- expires when the person ceases to carry out the designated role;
- expires when the person ceases to be eligible under rule 8.2.
- The SRA may at any time, on granting approval for the designation of a person under this Part, or otherwise, make the holding of a material interest in a licensed body subject to conditions in accordance with paragraphs 17, 28 or 33 of Schedule 13 to the LSA.
- The SRA may at any time withdraw approval of a person's designation under rule 13.1, 13.3 or 13.6 if it is not satisfied that the person is fit and proper to undertake the designated role.
- A person whose designation has been approved under rule 13.1, 13.3 or 13.6, must notify the SRA promptly of any information in relation to them which would be relevant to an assessment of their fitness and propriety under the SRA Assessment of Character and Suitability Rules, and may be required to provide a self-declaration of their fitness and propriety on request by the SRA.
- In respect of a person whose designation has been approved under rule 13.3, the obligation to notify under rule 13.10 applies when the person is holding an approved post and extends to information relating to matters taking place at any time, following their approval, irrespective of whether they were holding an approved post at the time.
- Where the SRA withdraws approval for the designation of a person who is the director of a company, the SRA may set separate dates for the individual ceasing to be a director and disposing of their shares.
Part 5: Succession, loss of eligibility and temporary emergency authorisation
- If the last remaining legally qualified manager of an authorised body whose role ensures the body's compliance with the eligibility requirements for its authorisation under rule 1:
- is sentenced to imprisonment;
- becomes unable to carry on their role because of incapacity;
- abandons the business;
- is made subject to a restriction, condition or other regulatory decision by the SRA or another regulatory body which would prevent or restrict them acting as a manager, or
- is unable to fulfil the role for any other reason,
- Subject to any prescribed application requirements, the SRA may:
- transfer a body's authorisation to another body where the first body ceases to exist and the second body succeeds to the whole or substantially the whole of its business;
- substitute a body's authorisation for another type of authorisation where it is satisfied that the body is materially carrying on the same practice, notwithstanding a change in its management or control; and
- permit any person previously approved as a manager, owner, or compliance officer of the body to continue to act in their designated role, notwithstanding the transfer or substitution.
- An application for temporary emergency authorisation may be made:
- within seven days of any change in the management or control of an authorised body which brings into being a new unauthorised body or practice;
- within 28 days of the death or incapacity of a sole practitioner by a solicitor or an REL who is:
- the sole practitioner's executor, personal representative, attorney under a lasting power of attorney, or Court of Protection deputy (as appropriate);
- a practice manager appointed by the sole practitioner's executor, personal representative, attorney under a lasting power of attorney, or Court of Protection deputy (as appropriate); or
- an employee of the practice.
- An application for temporary emergency approval of a compliance officer may be made within seven days of an authorised body ceasing to have a COLP or COFA whose designation is approved under Part 4.
- The SRA will only grant an application under rule 15.1(a) or 15.2 if it is satisfied that:
- the body or its managers could not reasonably have commenced a substantive application for authorisation under Part 2 in advance of the events giving rise to the application;
- in relation to an application under rule 15.1(a) the body meets the eligibility requirements under rule 1.1 and will comply with our regulatory arrangements as they apply to authorised bodies; or
- in relation to an application under rule 15.2, it has no reason to believe that the individual to which the application relates is not fit and proper to be a compliance officer of the authorised body.
- Temporary emergency authorisation or approval:
- shall be granted for an initial period of 28 days from the date specified;
- may be extended for such period as the SRA thinks fit;
- shall be extended, if a substantive application for authorisation or approval is made during the period of temporary emergency authorisation or approval, pending determination of the substantive application;
- may be revoked, withdrawn, or made subject to such conditions as the SRA considers appropriate, in the public interest,
- An authorised body which:
- has taken over the whole or a part of one or more authorised bodies; or
- has split or ceded part of its practice to another authorised body and wishes the SRA to take this into account in determining its periodical fee,
- A licensable body will be eligible to be a recognised body if as at 6 October 2011, it has been recognised by the SRA under section 9 of the AJA but has an interest holder or manager that is not a lawyer or a legally qualified body. It shall continue to be treated as a recognised body for the purposes of these rules and the SRA's regulatory arrangements until:
- such time as it ceases to comply with the management and control requirements set out in paragraph 2 below; or
- the end of the transitional period under Part 2 of Schedule 5 to the LSA, or such earlier time as the body may elect,
- The management and control requirements are:
- at least 75% of the body's managers must be:
- individuals who are, and are entitled to practise as, lawyers of England and Wales, advocates or solicitors in Scotland, members of the Bar of Northern Ireland, solicitors of the Court of Judicature of Northern Ireland or RFLs; or
- bodies corporate which are legally qualified bodies,
- individuals who are, and are entitled to practise as, lawyers of England and Wales, advocates or solicitors in Scotland, members of the Bar of Northern Ireland, solicitors of the Court of Judicature of Northern Ireland or RFLs must make up at least 75% of the ultimate beneficial ownership of the body; and
- individuals who are, and are entitled to practise as, lawyers of England and Wales, advocates or solicitors in Scotland, members of the Bar of Northern Ireland, solicitors of the Court of Judicature of Northern Ireland or RFLs, and/or legally qualified bodies, must:
- every interest holder of the recognised body, and every person who exercises or controls the exercise of any voting rights in the body, must be:
- an individual who is, and is entitled to practise as, a lawyer of England and Wales, an advocate or solicitor in Scotland, a member of the Bar of Northern Ireland, a solicitor of the Court of Judicature of Northern Ireland or an RFL;
- a legally qualified body; or
- an individual who is approved by the SRA, and is a manager of the body;
- an individual who is not entitled under paragraph 2(d)(i) may be an interest holder of a recognised body without being a manager of the body if:
- the recognised body is a company which is wholly or partly owned by a partnership or LLP which is a legally qualified body;
- the individual is approved by the SRA and is a manager of the partnership or LLP; and
- the individual is precluded under the partnership agreement or members' agreement from exercising or authorising any vote in relation to the company.
- at least 75% of the body's managers must be:
For the purposes of this annex, "legally qualified body" means a body which is:
- a recognised body; or
- an authorised non-SRA firm of which individuals who are, and are entitled to practise as, lawyers of England and Wales, advocates or solicitors in Scotland, members of the Bar of Northern Ireland or solicitors of the Court of Judicature of Northern Ireland or RFLs make up at least 75% of the ultimate beneficial ownership.
The professional services referred to in rule 6.1(b) are:
- Alternative dispute resolution.
- Financial services.
- Estate agency.
- Management consultancy.
- Company secretarial services.
- Other professional and specialist business support services including human resources, recruitment, systems support, outsourcing, transcription and translating.
- Acting as a parliamentary agent.
- Practising as a lawyer of another jurisdiction.
- Acting as a bailiff.
- Accountancy services.
- Education and training activities.
- Authorship, journalism and publishing.
Made by the SRA Board on 30 May 2018.
Made under sections 31 of the Solicitors Act 1974, sections 9 and 9A of the Administration of Justice Act 1985, and section 83 of, and Schedule 11 to, the Legal Services Act 2007.