QUESTION OF ETHICS ; ;Q I have received correspondence from solicitors whose letterhead states that the practice is a limited company.

I did not know that a solicitor could practise as a limited company.

Can I deal with them? ;A Yes.

The Solicitors Incorporated Practice Rules 1988 allow solicitors and Registered European Lawyers (RELs) to incorporate their practices, provided the incorporated practice is recognised by the Law Society under the Administration of Justice Act 1985 as a recognised body.

Regulation and Information Services (0870 606 2555) can confirm whether or not the practice is recognised by the Law Society.

A recognised body can be a company limited by shares or an unlimited company.

Only solicitors, RELs, registered foreign lawyers and certain non-registered European lawyers can be directors, members and beneficial owners of shares in a recognised body.

If the recognised body is a limited company the liability of the shareowners as such is limited.

However, the liability of the individual fee earner or other negligent person remains unlimited.

An information pack is available from Professional Ethics.

; ;Q In order to be recognised by the Law Society (and become a recognised body), does an incorporated practice have to have a share capital? ;A Yes, r.9(1)(a) of the Solicitors Incorporated Practice Rules 1988 states that a recognised body has to be registered in England and Wales under the Companies Act 1985 as an unlimited company having a share capital or as a company limited by shares.

It is likely this rule will be changed when the law changes to allow limited liability partnerships (actually a kind of body corporate) but, at the moment, that is the current position.

; ;l Question of ethics is compiled by the Law Societys professional ethics guidance team.

Send questions for publication to Austin OMalley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.