Who May Buy, and How Fast
The rules of each profession restrict who may own the practice at all — they define the eligible buyers, they sometimes set the clock, and they add compliance steps to the transfer
Written by
Martin Kotze
Attorney, Conveyancer & Notary Public
Last reviewed:
Contents
At a Glance
| Profession | Who may own | Statutory clock | Practical note |
|---|---|---|---|
| Attorneys (LPA) | Practising attorneys only | No statutory grace period | Buyers need Fidelity Fund certificates; past shareholders stay liable for firm debts |
| Health practitioners (HPCSA) | Appropriately registered practitioners only | No stated grace period | Practice numbers are practitioner-linked; a locum bridges up to six months |
| Registered auditors (APA) | Registered auditors, each of whom must also be a director | Six months (extendable by the Regulatory Board) | During that period the estate’s shares carry no votes, remuneration or profits |
| Community pharmacy | Open to non-pharmacists since 2003 | None | Subject to licensing and a responsible pharmacist — outside buyers are possible |
Attorneys’ Firms
Under section 34(7) of the Legal Practice Act, a law firm practising as a commercial juristic entity must, in its founding documents, provide that its “shareholding, partnership or membership… is comprised exclusively of attorneys”. A deceased attorney’s spouse or children cannot inherit the shares of the incorporated practice; the estate must dispose of them to practising attorneys.
Unlike the old Attorneys Act, which expressly allowed an estate to hold the shares for six months without votes, the Legal Practice Act re-enacted no grace period. The profession’s own commentators note that there is no statutory relief mechanism, and describe real cases of practice paralysis: where a small firm’s only or main director dies, the board can cease to exist, the trust account can end up under curatorship under section 90 of the Act, and the Legal Practice Council has had to improvise “caretaker” appointments.
What this means for the agreement
Buyer eligibility warranties
The buyers must be practising attorneys in possession of Fidelity Fund certificates, and the agreement should warrant that they are and will remain so.
Transfer mechanics that operate fast
The executor’s powers addressed in the will, MOI compulsory-transfer provisions aligned, and signed transfer documentation contemplated in advance.
Board continuity
The MOI should provide for the board’s continuity if a director dies — otherwise a one-director firm has no board at all.
The debts dimension
Section 34(7)(c) makes all present and past shareholders, partners or members jointly and severally liable together with the entity for its debts and liabilities contracted during their period of office — and in respect of any theft committed during that period. The estate remains exposed, so the agreement should deal with indemnities and suretyship releases.
One mercy peculiar to attorneys: professional indemnity run-off is largely built in, because the Legal Practitioners Indemnity Insurance Fund master policy responds to claims arising from work done while the practitioner held a Fidelity Fund certificate, even after death — provided the firm was properly registered in an authorised practice form.
Medical, Dental and Other HPCSA Practices
Health practitioners registered under the Health Professions Act may practise in partnership or as incorporated practices only with other registered practitioners — generic Ethical Rule 8, read with the section 54A exemption under which incorporated practices operate. The HPCSA’s Business Practices Policy (March 2024) confirms that a person not registered under the Act may not directly or indirectly share in the profits or hold an interest in a practice.
The result mirrors the attorneys’ position: heirs who are not registered practitioners cannot keep the shares or draw the profits, and the buyer pool is confined to appropriately registered colleagues. The HPCSA’s published rules contain no stated grace period for a deceased practitioner’s estate, so prudent planning treats the disqualification as immediate and relies on the buy-and-sell to deliver a rapid, compliant exit.
The practical plumbing
Practice numbers do not transfer
Practice (PCNS) numbers are practitioner-linked, so a purchasing partner or incoming practitioner needs their own registrations. Medical-scheme network contracts do not simply follow the shares.
A locum can bridge the gap
A registered locum can keep the practice running while the buy-out completes. HPCSA practice limits locum engagements to six months, which is a useful outer planning horizon.
Mixed multi-disciplinary practices
Since the 2023 amendments to the Ethical Rules opened structured multi-disciplinary practice, mixed practices should check which professional category each buyer must hold.
Valuation needs particular care
Much of the “goodwill” in a medical practice is personal to the practitioner. The buy-and-sell price should be built on what is genuinely transferable — rooms, equipment, staff, contracts and the practice’s institutional patient base.
Accounting and Audit Firms
Audit firms have the strictest — and, helpfully, the clearest — regime. Under section 38 of the Auditing Profession Act, only registered auditors may be shareholders of a firm registered as a registered auditor, and every shareholder must be a director and vice versa.
The statute supplies the timetable
On a shareholder’s death the estate may continue to hold the shares for six months (or longer with the Regulatory Board’s approval), but during that period the shares carry no voting rights, and the estate’s representative may not act as director or receive directors’ remuneration or profits.
In other words, the statute already forces the sale and starts the clock. The buy-and-sell agreement’s job is to make sure that when the six months expire there is a willing, funded, registered-auditor buyer at a fair price — rather than a distressed disposal by an executor with no alternative.
Audit firms carry the same debt exposure
Section 38(3)(a) requires the company’s memorandum of incorporation to provide that its directors and past directors are jointly and severally liable, together with the company, for its debts and liabilities contracted during their periods of office — the same exposure attorneys’ incorporated practices carry. A deceased auditor’s estate therefore remains on risk for firm debts, and the buy-and-sell should deal with indemnities and suretyship releases alongside the share purchase.
Non-audit accounting practices
These are more flexible. SAICA permits various entity forms for non-audit work, and firms outside the audit space may have non-CA shareholders. But mixed firms must check which regime binds the specific shares being sold — the audit registration is what triggers section 38, not the firm’s name on the door.
The Contrast Case, and Everyone Else
Not every profession locks the buyer pool. Community pharmacy ownership was opened to non-pharmacists in 2003, subject to licensing and a responsible pharmacist, so a pharmacy buy-and-sell can contemplate outside buyers in a way a medical or legal practice cannot. Veterinary practice rules restrict partnerships to registered veterinary and para-veterinary professionals. Engineering and architectural consultancies face contractual and membership requirements rather than statutory ownership bars.
The planning point
Identify the ownership rule for your profession first, because it determines who can lawfully sign the buy-and-sell as a buyer — and what happens if a nominated buyer is disqualified before the trigger event, which the agreement should also answer.
Check Your Practice’s Ownership Rules
The profession’s rules decide who may buy, how fast, and what the transfer needs alongside it. Getting that wrong is not a tax problem — it is a regulatory one.
Practice Succession Knowledge Hub
The complete guide to buy-and-sell agreements for South African professional practices, split into the parts you are most likely to need.
Buy-and-Sell Agreements for Professional Practices
The pillar guide — what happens without one, the two legs, validity, and what is actually being bought.
Funding Structure & the Premium Traps
Cross-holding, the structures to avoid, and the three premium mistakes that destroy the estate duty exemption.
The Tax Treatment
Estate duty, capital gains tax, income tax, STT and donations tax — with a worked example and the 2026/27 figures.
The Agreement & What Goes Wrong
The clause-by-clause checklist, disability and lifetime buy-outs, the twelve failure modes, and the roadmap.
Frequently Asked Questions
The questions practice owners actually ask — premiums, family trusts, loan accounts, new and departing partners.
Why you can trust this: Martin Kotze has been an admitted Attorney of the High Court of South Africa, registered Conveyancer, and Notary Public since 2014, practising from Pretoria. The firm is regulated by the Legal Practice Council under firm registration 17444.
This guide is general information, not legal advice for your specific matter.