Ownership of an LP
51% of the LP must be owned and controlled by solicitors and/or members of specified regulated professions. The remaining 49% can be made up of other investors.
Ownership models will vary – for example some LPs might have solicitors retaining a majority stake, others might have solicitors with a minority stake, and, in some instances, the LP could have no solicitor stakeholders at all.
Regulated professions:
- Actuary
- Architect
- Barrister
- Chartered Accountant
- Chartered Certified Accountant
- Chartered Management Accountant
- Chartered Public Finance Accountant
- Chartered Surveyor
- Commercial Attorney
- Licensed Conveyancer
- Patent Attorney
- Registered Trade Mark Attorney or Agent
Solicitor investors
A solicitor investor must be a solicitor qualified in Scotland, England and Wales or Northern Ireland, a Registered European Lawyer or Registered Foreign Lawyer. Solicitor investors must be eligible to practise in Scotland and have a current practising certificate without restrictions.
Regulated professional investors
Regulated professional investors must be entitled to practise under regulation by their professional association and are required to pass fit and proper testing. Areas covered will include; financial position and business record, regard for the law or authority and probity and character.
Other investors
The remaining 49% of investors would also have to undertake fit and proper testing although there will be discretion for the Law Society as to extent of that testing for those who hold less than a 10% share of the LP.
Non-solicitor investors are required to pass a fit and proper test. Solicitors will already have undergone a fit and proper test as part of their admission to the profession.
Relevant factors as to fitness, include details about the background, finances and probity of potential investors.
Factors that would automatically result in a presumption of unfitness would include -
- if the investor is subject to a trust deed
- if the investor has been adjudged bankrupt and has not been discharged from bankruptcy
- if the investor is disqualified from holding, or has been removed by a court from, a position of business responsibility (eg director of a charity)
- if the investor has been convicted of an offence involving dishonesty or, in respect of any offence, has either been sentenced to 12 months or more in prison, or has been fined at least the level four amount on the standard scale)