Can a private equity company buy into the firm or take an option to buy it later?
• The private equity company can’t buy into the firm until ABSs are permitted. LDPs cannot include non-lawyer corporate membership. As to an option to buy, firms are warned to take great care. It could well give rise to problems under the rules. The ownership and control of firms that can be regulated by the SRA are constrained by the law and regulations. Additionally, a fee-sharing arrangement cannot go beyond what is permitted under rule 8.02. For example, an option to buy at less than a commercial rate could suggest a transfer of ownership at the earlier date. Did this answer your question?
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