Licensed Body Authorisation and Alterative Business Structure (ABS) Authorisation


What is Licensed Body Authorisation?

Licensed Body Authorisation is the formal approval granted by the Solicitors Regulation Authority (SRA) that allows a law firm to operate as a Licensed Body — more commonly referred to as an Alternative Business Structure (ABS). Under this model, non-lawyers can hold an ownership stake or take part in the management of a firm, alongside qualified solicitors, while still providing regulated legal services.

This framework was introduced to modernise the legal sector and encourage innovation, investment, and diversity in service delivery. By opening up ownership and management to non-lawyers, Licensed Body Authorisation enables law firms to bring in external expertise — such as accountants, business professionals, or investors — to help grow and improve the business.

To obtain Licensed Body Authorisation, a firm must go through a rigorous application process with the SRA. This includes demonstrating that it meets all regulatory requirements, has robust systems for compliance and client protection, and that its owners and managers pass the SRA’s “fit and proper” suitability tests.

In short, Licensed Body Authorisation offers opportunities for growth and flexibility, but it also carries responsibilities. Firms must maintain the same high professional and ethical standards as traditional practices, with additional layers of regulatory oversight to ensure client interests remain safeguarded.

Contact us for a consultation and expert advice on SRA Compliance.

Is an Alterative Business Structure (ABS) Right for Your Firm?

An Alternative Business Structure (ABS) can offer law firms greater flexibility, access to external investment, and the ability to diversify their services. This model is particularly attractive to firms looking to bring in non-lawyer expertise — such as finance, technology, or business development specialists — to strengthen their management and operations. However, obtaining SRA approval for Licensed Body Authorisation requires careful planning, robust risk management, and strict adherence to compliance measures set out by the regulator.

Before deciding whether an ABS is right for your firm, it is important to assess both the opportunities and the challenges. While an ABS can give you greater scope to attract external capital and expand your service offering, it also means your firm will be subject to increased regulatory scrutiny. The SRA will require clear evidence of strong governance structures, financial stability, and client protection mechanisms. For many firms, working with experienced legal consultants can make the difference between a smooth application process and a delayed or rejected authorisation.

How MAR Legal Can Assist with ABS Authorisation

We guide law firms and businesses through the Licensed Body Authorisation process, offering:

  • Application Support – Helping firms prepare and submit ABS applications to the SRA.
  • Regulatory Compliance Planning – Ensuring firms meet SRA compliance and risk management requirements.
  • Business Structure Advice – Assisting firms in structuring their ABS to maximise efficiency and investment potential.
  • COLP & COFA Guidance – Supporting Compliance Officers in fulfilling their regulatory duties.
  • Ongoing Compliance Management – Providing continued support to maintain SRA compliance after authorisation.

To learn more about the SRA’s requirements for ABS firms, visit the Solicitors Regulation Authority’s official guidance on licensed body authorisation

Contact Us info@marlegal.co.uk

Key Considerations for Licensed Body Authorisation

Licensed Body Authorisation opens the door for law firms to grow and innovate. By adopting an ABS structure, firms can attract external investment, diversify their services, and involve non-lawyer professionals in management roles. This can improve efficiency, enhance client services, and strengthen competitiveness in the legal sector. However, success depends on strict compliance with SRA rules, making professional guidance essential.

Ownership & Management

How non-lawyer stakeholders will be involved in your firm’s operations.

SRA Suitability Test

Ensuring key personnel meet SRA “fit and proper” criteria.

Financial & Risk Management

Developing policies to comply with SRA financial and risk management requirements.

Client Protection Measures

Implementing systems to safeguard client interests and maintain ethical standards.

Licensed Body Authorisation – Expert ABS Guidance from MAR Legal

Expert support for law firms seeking Licensed Body Authorisation and ABS approval from the Solicitors Regulation Authority.

Further Information on SRA Compliance

SRA Compliance New Firm Authorisation The SRA Transparency Rules


Get Expert Guidance on ABS Licensing

Becoming an ABS can be a strategic move for law firms, but the authorisation process can be complex. MAR Legal offers tailored guidance to ensure a smooth transition to ABS status while meeting all SRA regulatory obligations.

Contact us today to learn how we can support your firm in obtaining Licensed Body Authorisation and maintaining regulatory compliance.

Contact Us info@marlegal.co.uk

FAQs About Licensed Body Authorisation

Licensed Body Authorisation is approval from the Solicitors Regulation Authority (SRA) allowing a firm to operate as an Alternative Business Structure (ABS). This means non-lawyers can own or manage the firm while it continues to provide regulated legal services.

The timeline varies depending on the complexity of your firm’s structure and the completeness of your application. Typically, the SRA review and approval process can take several months, so early preparation is key.

The SRA requires firms to demonstrate strong governance, risk management, and compliance processes. This includes meeting the suitability test for owners and managers, implementing client protection measures, and ensuring compliance officers (COLP/COFA) are in place.

Yes. One of the main advantages of an ABS is that non-lawyers can hold ownership or management roles in the business. This flexibility allows law firms to bring in external expertise and investment.

We provide end-to-end support, from preparing your ABS application to advising on compliance frameworks. Our team ensures your firm meets SRA requirements, reducing risk and streamlining the authorisation process.