The Licensed Legal Services (Interests in Licensed Providers) (Scotland) Regulations 2012

Majority interests in licensed providers

2.—(1) For the purposes of section 49(1) of the Act (majority ownership), the qualifying investors in an entity are regarded as having at least a 51% stake in the total ownership or control of that entity only if, taken together, they—

(a) are entitled to exercise, and control the exercise of, 51% or more of the voting or equivalent rights in the entity;

(b) would be entitled to receive, if all of the income of the entity were to be distributed among the members, 51% or more of the amount so distributed; and

(c) would be entitled to receive, if all of the assets of the entity were to be distributed among the members (for example, on the winding-up or dissolution of the entity), 51% or more of the amount so distributed.

(2) In the operation of paragraph (1)—

(a) any rights that a person has as a loan creditor are to be disregarded; and

(b) the references to “members” are to be construed as—

(i) in relation to a company, the holders of shares in the company;

(ii) in relation to a limited liability partnership, the members;

(iii) in relation to a partnership, the partners; and

(iv) in relation to any other body or association, the members of that body or association.