No. S 699
Legal Profession Act
(CHAPTER 161)
Legal Profession
(Law Practice Entities) Rules 2015
In exercise of the powers conferred by sections 136, 150, 166 and 184 of the Legal Profession Act, the Minister for Law makes the following Rules:
PART 1
PRELIMINARY
Citation and commencement
1.  These Rules may be cited as the Legal Profession (Law Practice Entities) Rules 2015 and come into operation on 18 November 2015.
Definitions
2.—(1)  In these Rules, unless the context otherwise requires —
“Central Provident Fund Board” means the Central Provident Fund Board constituted under section 3 of the Central Provident Fund Act (Cap. 36);
“client account” has the same meaning as in rule 2(1) of the Legal Profession (Solicitors’ Accounts) Rules (R 8);
“conveyancing account”, “conveyancing (CPF) account” and “conveyancing money” have the same meanings as in rule 2(2) of the Conveyancing and Law of Property (Conveyancing) Rules 2011 (G.N. No. S 391/2011);
“equity holding director”, in relation to a law corporation or a foreign law practice constituted as a corporation, means a director of the law corporation or foreign law practice who holds equity interests in the law corporation or foreign law practice (as the case may be);
[S 480/2018 wef 01/08/2018]
“foreign group practice” means 2 or more licensed foreign law practices which practise in mutual cooperation, and which expressly practise as a group under a group name;
[S 480/2018 wef 01/08/2018]
“relevant appeal”, “relevant proceedings” and “Singapore International Commercial Court” have the same meanings as in section 36O(1) of the Act;
“Singapore group practice” means 2 or more Singapore law practices which practise in mutual cooperation, and which expressly practise as a group under a group name, and includes a group practice (however constituted) referred to in rule 41(15).
[S 480/2018 wef 01/08/2018]
(2)  For the purposes of these Rules, a law corporation and a law firm (being a sole proprietorship) are related if —
(a)every shareholder of the law corporation is the sole proprietor, a consultant or an employee of the law firm; and
(b)every director, consultant or employee of the law corporation is the sole proprietor, a consultant or an employee of the law firm.
(3)  For the purposes of these Rules, a law corporation and a law firm (being a partnership of 2 or more solicitors) are related if —
(a)every shareholder of the law corporation is a partner, a consultant or an employee of the law firm; and
(b)every director, consultant or employee of the law corporation is a partner, a consultant or an employee of the law firm.
(4)  For the purposes of these Rules, a law corporation and a limited liability law partnership are related if —
(a)either of the following applies:
(i)the limited liability law partnership is the sole shareholder of the law corporation;
(ii)every shareholder of the law corporation is a partner, a consultant or an employee of the limited liability law partnership; and
(b)every director, consultant or employee of the law corporation is a partner, a consultant or an employee of the limited liability law partnership.
(5)  For the purposes of these Rules, 2 law corporations are related if —
(a)either of the following applies:
(i)the first law corporation is the sole shareholder of the second law corporation;
(ii)every shareholder of the second law corporation is either or both of the following:
(A)a shareholder of the first law corporation;
(B)a director, a consultant or an employee of the first law corporation; and
(b)every director, consultant or employee of the second law corporation is a director, a consultant or an employee of the first law corporation.
Threshold requirements for Singapore law practice
3.—(1)  Every Singapore law practice must satisfy all of the following requirements (called in these Rules the general threshold requirements):
(a)the number of solicitors practising in the Singapore law practice is at least 2 times the total number of regulated foreign lawyers (if any) who practise in, are directors, partners or shareholders in, or share in the profits of, the Singapore law practice;
(b)the number of solicitors who are partners, directors or managers (as the case may be) of the Singapore law practice is at least 2 times the total number of regulated foreign lawyers (if any) who are partners or directors (as the case may be) of the Singapore law practice;
(c)the managing partner, managing director or manager (as the case may be) of the Singapore law practice is a solicitor;
(d)the regulated foreign lawyers (if any) who practise in, who are directors, partners or shareholders in, or who share in the profits of, the Singapore law practice, and the foreign law practices (if any) which have approval under section 176(9) of the Act to be shareholders in or to share in the profits of the Singapore law practice, collectively —
(i)are entitled to exercise or control the exercise of not more than one‑third of the total voting rights exercisable in respect of the management of the Singapore law practice;
(ii)are entitled to exercise or control the exercise of not more than one‑third of the total voting rights exercisable by the partners or shareholders (as the case may be) of the Singapore law practice; and
(iii)hold not more than one‑third of the total value of equity interests in the Singapore law practice;
(e)the regulated non‑practitioners (if any) in the Singapore law practice —
(i)are entitled to exercise or control the exercise of not more than 25% of the total voting rights exercisable in respect of the management of the Singapore law practice;
(ii)are entitled to exercise or control the exercise of not more than 25% of the total voting rights exercisable by the partners or shareholders (as the case may be) in the Singapore law practice; and
(iii)hold not more than 25% of the total value of equity interests in the Singapore law practice;
(f)where there are one or more regulated foreign lawyers who practise in, who are directors, partners or shareholders in, or who share in the profits of, the Singapore law practice, or one or more foreign law practices which have approval under section 176(9) of the Act to be shareholders in or to share in the profits of the Singapore law practice, and there are one or more regulated non‑practitioners in the Singapore law practice, all of them collectively —
(i)are entitled to exercise or control the exercise of not more than 35% of the total voting rights exercisable in respect of the management of the Singapore law practice;
(ii)are entitled to exercise or control the exercise of not more than 35% of the total voting rights exercisable by the partners or shareholders (as the case may be) in the Singapore law practice; and
(iii)hold not more than 35% of the total value of equity interests in the Singapore law practice.
(2)  Every Singapore law practice that distributes its profits to any person who is not a solicitor practising in the Singapore law practice must satisfy all of the following requirements (called in these Rules the profit threshold requirements):
(a)the total amount of payments made by the Singapore law practice, during any financial year of the Singapore law practice, to all of the following does not exceed one‑third of the total profits of the Singapore law practice during that financial year, based on the audited financial statement of the Singapore law practice for that financial year:
(i)foreign lawyers (if any) who have approval under section 176(1) of the Act to share in the profits of the Singapore law practice;
(ii)foreign law practices (if any) which have approval under section 176(9) of the Act to share in the profits of the Singapore law practice;
(b)the total amount of payments made by the Singapore law practice, during any financial year of the Singapore law practice, to regulated non‑practitioners (if any) who have been registered under section 36G of the Act to share in the profits of the Singapore law practice does not exceed 25% of the total profits of the Singapore law practice during that financial year, based on the audited financial statement of the Singapore law practice for that financial year;
(c)where —
(i)there are one or more foreign lawyers or foreign law practices who or which have approval under section 176(1) or (9), as the case may be, of the Act to share in the profits of the Singapore law practice; and
(ii)there are one or more regulated non‑practitioners (if any) who have been registered under section 36G of the Act to share in the profits of the Singapore law practice,
the total amount of payments made by the Singapore law practice, during any financial year of the Singapore law practice, to all of them, collectively, does not exceed 35% of the total profits of the Singapore law practice during that financial year, based on the audited financial statement of the Singapore law practice for that financial year.
(3)  In paragraphs (1) and (2), “solicitor” means a solicitor practising in a Singapore law practice who —
(a)has in force a practising certificate; and
(b)is not a nominee of any foreign law practice or foreign lawyer in respect of the management of, or the control of any voting power or equity interest in, the Singapore law practice.
(4)  For the purposes of paragraph (3), a solicitor is deemed to be a nominee of a foreign law practice or foreign lawyer if that solicitor is accustomed, or under an obligation whether formal or informal, to act in accordance with the directions, instructions or wishes of that foreign law practice or foreign lawyer.
Made on 6 November 2015.
NG HOW YUE
Permanent Secretary,
Ministry of Law,
Singapore.
[LAW 32/001/8.28 Vol. 1; AG/LEGIS/SL/161/2015/7 Vol. 3]
(To be presented to Parliament under section 131 (renumbered as section 185 from 18 November 2015) of the Legal Profession Act).