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Transfer of a practice

Q. I am a sole practitioner. After many years in sole practice and with the benefit of advice from my accountant I have made a decision to incorporate my practice. What does this involve from a regulatory perspective and what are my obligations?

A. A decision to incorporate an existing practice is in effect a decision to transfer an existing practice to a new practice and there are a number of compliance issues that need to be considered.

The main issues are as follows:

1. Rule 6 of the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (see right#) provides practical guidance regarding transfer of client files, safe custody property and trust monies. Rule 6 requires that before you deliver possession of your practice to the practice acquiring your practice (ie the incorporated legal practice (ILP)), you must provide each client with a written notice, advising them that at the expiration of the 14 days, (or such other period as may be reasonable in the circumstances);

  1. you intend to transfer the clients’ documents, files and safe custody documents to the ILP unless a contrary direction is received from them;
  2. your client’s right to give you a contrary direction in relation to the conduct of their affairs and the delivery of their documents;
  3. the balance of money (trust money) held on your client’s behalf;
  4. your intention to transfer the relevant account (trust monies) to the ILP unless advised by the client to the contrary;
  5. your client’s right to give you a contrary direction as to the manner in which you should deal with the account (trust monies) on their behalf.

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