Setting up an SRA Regulated Business: A Practical Guide for UK Businesses

Setting up an SRA regulated business is a major step for any organisation planning to offer reserved legal activities in England and Wales. While regulation brings responsibility and ongoing obligations, it also offers credibility, trust, and access to a wider client base.

For many founders and directors, the process can feel complex at first. There are forms to complete, rules to follow, systems to put in place, and ongoing compliance to maintain. The good news is that with the right planning and professional support, becoming regulated does not need to be overwhelming.

This guide is written as an easy, practical read for businesses that want a clear understanding of what regulation involves, what decisions must be made early on, and how to avoid common pitfalls. We also explain how MAR Legal supports businesses step-by-step, from initial planning through to authorisation and ongoing compliance.

Important Decisions to Make Early On

Before you apply for regulation, there are several key decisions that should be made at the outset. Getting these right early can save time, cost and frustration later.

1. Business structure

You will need to decide whether your business operates as:

• A limited company
• A limited liability partnership (LLP)
• Another approved structure

Your structure affects ownership, governance, reporting obligations and how the regulator assesses risk.

2. Ownership and management

You must identify:

• Owners and shareholders
• Directors or members
• Individuals responsible for compliance and finance

These roles must be filled by suitable individuals who meet the regulator’s standards.

3. Services offered

Only certain activities require regulation. Understanding exactly which services you intend to provide helps define:

• Whether regulation is required
• Which permissions you need
• How your systems and insurance should be structured

4. Compliance responsibility

Every regulated business must appoint individuals responsible for:

• Legal compliance
• Financial compliance

These roles carry personal responsibility, so clarity and training are essential.

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What Does It Mean to Be SRA Regulated?

Being regulated by the Solicitors Regulation Authority means your business is authorised to provide regulated legal services under a strict framework of professional standards.

Regulation is designed to:

• Protect clients
• Ensure ethical conduct
• Maintain confidence in the legal profession

The regulator sets out clear rules covering conduct, transparency, client care, accounts, and risk management.

You can explore the regulator’s official guidance, codes and application requirements directly on its website:
https://www.sra.org.uk

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SRA Regulation Requirements Explained

Meeting SRA regulation requirements involves more than completing an application form. You must demonstrate that your business is properly run, financially stable, and able to protect client interests.

Key areas assessed include:

• Governance and decision-making
• Financial stability
• Risk management
• Client protection
• Professional indemnity insurance
• Policies and procedures

Regulation is not a one-off event. It is an ongoing commitment to meeting professional standards at all times.

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Requirements to Become an SRA Regulated Business

Below is a clear breakdown of what is typically required to secure authorisation.

1. Approved business structure

Your entity must be an approved structure capable of being regulated.

2. Authorisation application

A detailed application setting out:

• Ownership and control
• Services offered
• Management arrangements

3. Fit and proper persons

All key individuals must pass suitability assessments covering honesty, integrity and financial history.

4. Compliance roles

Appointment of individuals responsible for:

• Compliance with legal obligations
• Financial and accounts compliance

5. Professional indemnity insurance

Mandatory insurance must be in place at the required level before authorisation is granted.

6. Client money arrangements

Clear systems for holding, safeguarding and accounting for client funds.

7. Policies and procedures

Written policies covering areas such as:

• Complaints handling
• Anti-money laundering
• Data protection
• Risk management

8. Transparent pricing

Clear and accessible fee information for clients.

9. Office and operational systems

Demonstrating secure systems, confidentiality, and record-keeping.

10. Ongoing reporting

Ability to meet reporting and notification obligations once authorised.

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Top 10 Things People Often Forget to Adhere To

Even well-intentioned businesses can fall foul of small but important compliance details. Here are the most common issues we see.

• Assuming regulation ends at approval – SRA compliance for law firms is ongoing, not a one-time task.
• Fees not clearly displayed on the website – Pricing transparency is a frequent compliance failure.
• Incomplete complaints information – Clients must know how to complain and where to escalate issues.
• Out-of-date policies – Policies must be reviewed and kept current, not filed away.
• Incorrect firm details online – Trading names, authorisation status and contact details must be accurate everywhere.
• Lack of compliance training – Staff must understand their responsibilities, not just management.
• Poor record-keeping – Inadequate file notes and audit trails create regulatory risk.
• Client money confusion – Mixing client funds with business funds is a serious breach.
• Failure to notify changes – Ownership or role changes must be reported promptly.
• Weak data protection practices – Cybersecurity and confidentiality are closely scrutinised.

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Why Compliance Is a Business Advantage

While compliance is often seen as a burden, it delivers real commercial benefits:

• Increased trust from clients and partners
• Stronger internal systems
• Reduced risk of disputes and complaints
• Greater credibility when tendering or expanding

A properly run SRA authorised business setup is better positioned for long-term growth.

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Conclusion

Setting up an SRA regulated business requires careful planning, clear systems and ongoing commitment. Understanding the regulatory framework, meeting all requirements, and avoiding common oversights are essential to long-term success.

When done correctly, regulation supports professionalism, protects clients, and strengthens your brand. With the right guidance, businesses can move through authorisation confidently and operate efficiently from day one.

If issues such as unpaid invoices or client disputes arise, having strong systems and professional support in place allows matters to be addressed quickly and with minimal disruption.

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How MAR Legal Supports You

MAR Legal works hand-in-hand with businesses at every stage of the regulatory journey. From early planning and structure decisions to full authorisation and ongoing compliance, our experienced legal team provides clear, practical support tailored to your goals.

We help with:

• Initial feasibility and structure advice
• End-to-end authorisation applications
• Compliance frameworks and policies
• Ongoing regulatory support as your business grows

Learn more about our wider legal services in Manchester here:
👉 https://marlegal.co.uk/legal-services-in-manchester/

FAQs – Setting up an SRA Regulated Business