SRA Handbook

Duration of recognition, renewal date, revocation and expiry

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

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.