SQE 1 Free Trial - A man instructs his solicitor to act for him in the purchase of the entire issued share capital of a private limited company from another company. The solicitor advises on the share purchase and helps to prepare and negotiate all the necessary documentation. Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a ‘regulated activity’ as defined in the Financial Services and Markets Act 2000 and related secondary legislation. Has the solicitor breached the general prohibition against carrying on a regulated activity?

SRA Samples

A man instructs his solicitor to act for him in the purchase of the entire issued share capital of a private limited company from another company. The solicitor advises on the share purchase and helps to prepare and negotiate all the necessary documentation.

Neither the solicitor nor his firm is authorised by the Financial Conduct Authority to carry on a ‘regulated activity’ as defined in the Financial Services and Markets Act 2000 and related secondary legislation.

Has the solicitor breached the general prohibition against carrying on a regulated activity?

(A) Yes, because the solicitor has given advice on the purchase of shares in a specific company and no exclusion or exemption applies.

(B) Yes, because the transaction involves the purchase of the entire issued share capital of the company and no exclusion or exemption applies.

(C) No, because an exemption applies to professional firms which are supervised by the Solicitors Regulation Authority when they engage in corporate work.

(D) No, because an exclusion applies if the transaction relates to the purchase of any number of shares in a private limited company.

(E) No, because an exclusion applies if the transaction involves at least 50% of the voting shares in the company.

97 of 115