On your marks: ABS race is about to begin
The first wave of alternative business structures (ABSs) is on the way after the Council for Licensed Conveyancers (CLC) opened its doors for applications.
The CLC will be able to start licensing ABSs from 6 October and said it expects to take two days of work to consider standard applications – more where there are “unusual or complex ownership structures”.
However, the guidance notes say applicants can “reasonably expect to be licensed” 90 days after the CLC has received a complete application.
It is still not known when the Solicitors Regulation Authority will be able to start licensing ABSs – although last week chief executive Antony Townsend indicated January or February 2012 is likely – or when the application form will be ready.
The CLC has said it is expecting around 100 ABS applications this year. Applicants have to pay a non-refundable fee of £1,200 (or £600 if already a CLC recognised body), plus £80 an hour for any time beyond the two days and any money spent on external advice the CLC considers it needs. Applicants will also pay for data verification checks – including the Criminal Records Bureau – for every relevant person at around £100 each.
The three-part, 49-page application form has to show how the applicant will satisfy the over-riding principles and outcomes contained in the CLC’s code of conduct and licensed body code, as well as a detailed three-year business plan.
“Provision of adverse information does not necessarily mean we will reject an application,” the guidance notes stress. “Where adverse information is provided, it will be discussed with the applicant to determine the risk posed to the code of conduct’s outcomes; resource implications for the CLC; and the individual/body’s willingness or capacity to address the issue.”
The application has to detail all of those with a “material interest” in the ABS, meaning the individual or company:
- hold at least 10% or more shares in the body (or in a parent undertaking);
- are able to exercise significant influence over the management of the body (or a parent undertaking) due to their entitlement to exercise, or control the exercise of voting rights;
- are entitled to exercise or control the exercise, of voting powers in the body (or a parent undertaking), which, if it consists of voting rights, constitutes at least 10% or more of the voting rights; or
- as a partner having at least 10% interest in the capital or profits of the partnership.
This also includes any ultimately beneficial owner of more than 10%.
The CLC is currently only able to license ABSs which want to do reserved conveyancing and probate work, not litigation or advocacy. It has applied for the right to regulate such work; the Legal Services Board has until next February – extendable for a further four months if needed – to decide on the application, which is strongly opposed by the Lord Chief Justice.
Leave a Comment