Legal Practice Structures and Business Organisation
This domain tests how a Ghanaian law practice may lawfully be constituted, and how the choice of vehicle changes liability, control, tax and regulation. Expect questions comparing a sole practice, a partnership and an incorporated entity, and spotting arrangements that offend the rules on fee-sharing and lay control.
Choosing the vehicle
- Sole practitioner: admitted, called to the Bar and holding a current practising licence from the General Legal Council. Unlimited personal liability, simplest compliance, no separate entity to insure or audit.
- Partnership: governed by the partnership agreement and the Incorporated Private Partnerships Act 1962 (Act 152). Registration gives continuity beyond individual partners, but a partner's personal exposure for professional negligence is not capped the way a shareholder's is. The written agreement must cover capital, profit share, decision-making, admission and retirement, death, and dissolution.
- Company: available under the Companies Act 2019 (Act 992), but professional rules constrain it. The Legal Profession (Professional Conduct and Etiquette) Rules 1969 (LI 613) prohibit sharing professional fees with unqualified persons and require that the practice stay under lawyers' control.
What follows from the structure
Firm name and letterhead must be accurate and not misleading. The entity needs its own client account and records whatever its form. Employed lawyers act for their employer, not for private clients of their own. Office-sharing and chambers arrangements are acceptable only if confidentiality, conflicts and independence are preserved.
Worked example
Three lawyers form a partnership. An investor offers GHS 200,000 for 40 per cent equity. The reasoning: equity to a non-lawyer is a share of professional profits and hands control to an unqualified person, so it breaches LI 613. Alternatives that work: a partner loan at commercial interest; an arm's-length lease of premises or equipment from the investor's company; or a separate service company charging cost-plus for administration while taking no share of fees. The practice entity stays wholly lawyer-owned, the arrangement is documented in writing, and clients are told where a conflict of interest could arise.
Traps that cost marks
Assuming incorporation caps liability for professional negligence. Forming a partnership with no written terms and then litigating a deadlock. Letting a non-lawyer consultant direct legal work or sign client correspondence. Practising before the licence issues or after it lapses, which is a disciplinary matter whatever the firm's structure.