Lawyers in private practice have until the last day of this year to register their firms in accordance with the Legal Practitioners Act (LPA) or face disciplinary action.
The warning is the subject of a note sent to members of the Law Society of Botswana (LSB) in which the LSB Council calls on lawyers to desist from registering their law firms as liability companies with the Companies and Intellectual Property Authority (CIPA). “Council (of LSB) noted with concern that there are a significant number of law firms which have registered as limited liability companies (LLC) with the Companies and Intellectual Property Authority (CIPA),” it says in a note sent to members of LSB.
Sole proprieties and partnerships only
According to the LSB Council, in the establishment of a law firm, the Legal Practitioners Act (LPA) recognises sole proprieties and partnerships only, and not companies. It says it is aware that attorneys register their firms with CIPA primarily because of tax benefits that flow from having a separate legal personality from one’s firm.
“This, however, remains unlawful under the LPA and attorneys who have registered their firms as companies are directed to forthwith correct their registration status with CIPA,” says the note. It warns that members have up 31st December 2023 to rectify their registration status, failing which attorneys in charge of the law firms will face disciplinary action.
High professional standards
“Council will, however, make representations before the Minister of Justice to amend legislation and make it possible for attorneys to trade as companies (in view of) the economic situation that obtains not only in the country but globally,” says LSB Council. Meanwhile, Parliament passed the Legal Practitioners (Amendment) Act of 2022 last year in order to ensure high professional standards and integrity in the entire legal profession, as well as to provide for enhanced regulations.
The Minister of Justice, Machana Shamukuni said the aim of the law as amended is to address issues of malpractice, abuse of office, unprofessionalism and different forms of misconduct in the legal profession. He noted that Botswana had recently been assessed to evaluate its compliance with the anti-money laundering and terrorism financing standards of the Eastern and Southern Africa Anti-Money Laundering Group (ESAMLG) and the Financial Acting Task Force (FATAF).
FATAF standards
“These standards require legal practitioners to be subjected to a fit and proper test upon application to be admitted as attorneys,” he said. “The bill, therefore, proposes amendments to the Legal Practitioners Act which, when effected, will substantially comply with FATAF standards and address issues raised by the assessors.”
Clause 34 of the new LPA introduced an additional requirement that an applicant for a Fidelity Fund Certificate should submit an audit report to the Secretary of LSB confirming that the applicant had complied with requirements relating to the keeping of trust accounts.
Clause 45 obliges any legal practitioner to pay all interest of money deposited into the trust account, without any deduction, to the Fidelity Guarantee Fund. The clause also provides that a legal practitioner’s accounting records must be inspected where there was reasonable suspicion that the accounts were not in order. The new law replaced the Legal Practitioners Act that had been in existence for more than two decades.
