SRA Handbook

Changes in partnerships

Version 21 of the Handbook was published on 06/12/2018. For more information, please click 'History' Above

Part 6: Changes in partnerships

Rule 24: Change to the composition of a partnership

24.1

Authorisation of a partnership may continue despite a change in its composition, subject to Rules 24.2, 24.3, 24.4 and 25.

24.2

If there is a change to an authorised body, which is a partnership, which results in there being:

(a)

no remaining partner who was a partner before the change the authorised body must cease to practise from the date of the change; the 28 day period under Rule 23.1 does not apply;

(b)

only one remaining principal whose practice needs to be authorised as a recognised sole practice but could not reasonably have commenced an application in advance of the change:

(i)

the firm may continue to practise provided that the remaining principal:

(A)

is a solicitor or REL;

(B)

notifies the SRA within seven days;

(C)

is granted temporary emergency recognition under Rule 25 below;

(ii)

during the initial 28 day period, or such extended period as the SRA may allow, under any such temporary emergency recognition, the remaining principal must:

(A)

cease to practise, and notify the SRA; or

(B)

commence a substantive application under these rules for authorisation as a recognised sole practice, or if the remaining principal has taken on a new partner, as an recognised body or a licensed body, as appropriate;

(c)

an authorised body which will continue but one or more of the former partners intend to carry on as a separate firm, which must be authorised as an authorised body, but the principal(s) in the new firm could not reasonably have commenced an application for authorisation in advance of the change:

(i)

the new firm may practise from the date of the change provided that the new firm:

(A)

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

(B)

complies with the SRA Indemnity Insurance Rules;

(C)

notifies the SRA within seven days; and

(D)

is granted temporary emergency authorisation under Rule 25 below;

(ii)

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 authorisation;

(d)

a failure by:

(i)

a recognised body to comply with Rules 13.1 and 16.1 of the SRA Practice Framework Rules; or

(ii)

a licensed body to comply with Rules 14 and 16 of the SRA Practice Framework Rules,

the firm must cease to practise.

24.3

Following a partnership change under Rule 24.2(c), the SRA will if necessary decide which of the groups of former partners will continue to be covered by the existing authorisation and which must apply for a new authorisation, and may apportion authorisation fees and Compensation Fund contributions between the groups.

24.4

Any decision made under Rule 24.3 will be without prejudice to the outcome of any legal dispute between the former partners.

Rule 25: Temporary emergency authorisation

25.1

If a partnership split brings into being a new partnership or a new sole practitioner firm which is not an authorised body:

(a)

the SRA must be notified within seven days; and

(b)

temporary emergency authorisation may be granted, subject to Rule 25.2 to 25.4 below, so as to enable the partners in the new partnership or the sole practitioner to practise through the new firm for a limited period without breach of these rules and the SRA Practice Framework Rules.

25.2

An application for temporary emergency authorisation must be made on the prescribed form within seven days of the partnership split, and must be accompanied by all information and documentation the SRA may reasonably require.

25.3

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

(a)

The SRA must be satisfied that the partners or sole practitioner could not reasonably have commenced an application for authorisation in advance of the change.

(b)

In the case of a licensable body, the partnership must comply with Rule 14 (Eligibility criteria and fundamental requirements for licensed bodies) of the SRA Practice Framework Rules.

(c)

In the case of a legal services body or sole practitioner, the partnership or sole practitioner must comply with Rule 13 of the SRA Practice Framework Rules.

(d)

The partnership or sole practitioner must comply with Rules 12 (Persons who must be "qualified to supervise"), 15 (Formation, registered office and practising address) and 16 (Composition of an authorised body) of the SRA Practice Framework Rules.

(e)

The partnership or sole practitioner must comply with the SRA Indemnity Insurance Rules, and must have adopted a name under which the firm is to be registered and which complies with Chapter 8 (Publicity) of the SRA Code of Conduct.

25.4

Temporary emergency authorisation:

(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 authorisation commenced during the currency of a temporary emergency authorisation;

(e)

is granted or extended subject to the general conditions in Rule 8, unless otherwise specified by the SRA, and may be granted or extended subject to such other conditions as the SRA sees fit to impose having regard to the criteria in Rule 9;

(f)

is to be treated as a new authorisation for the purpose of these rules;

(g)

if granted, cannot prejudice the discretion of the SRA to refuse a substantive application for authorisation of the body under Part 2 or to impose any conditions on any such authorisation; and

(h)

in exceptional circumstances, and for reasonable cause, may be revoked at any time.

25.5

Recognised sole practices

(a)

If a sole practitioner dies:

(i)

the SRA must be notified within seven days;

(ii)

within 28 days of the death an emergency application may be made, on the prescribed form, for recognition as a recognised sole practice by a solicitor or REL who is:

(A)

the sole practitioner's executor;

(B)

a practice manager appointed by the sole practitioner's personal representatives

(C)

an employee of the firm.

(b)

If the emergency application for recognition is granted:

(i)

recognition will be deemed to run from the date of death;

(ii)

recognition will cease to have effect on the winding up of the estate or 12 months from the date of death, whichever is the earlier.