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Review Your SQE 1 Practice Records

Examination Timing: 00H01M36S

Mr. Taylor visits a solicitor. He informs the solicitor that he is a director of a company ('the Company') in which he is also employed. The Company is wholly owned by a US company ('the Parent'), and all other directors of the Company are officers of the Parent residing in the USA. Mr. Taylor resides in England. Mr. Taylor explains that the Parent has requested that the Company purchase a particular property in London ('the Property') from which the Company will operate to expand its existing business. He further explains that the board of directors of the Company ('the Board') has met to consider the Parent’s request and has resolved to proceed with the purchase of the Property, determining that such a purchase would promote the success of the Company. The solicitor is asked to advise on the purchase of the Property. 

Which of the following statements best explains who is the solicitor’s client?

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In this scenario, the solicitor's client is the Company. The Company is the legal entity that will be purchasing the Property and is the entity on whose behalf the solicitor's advice is sought. Although the Parent company has requested the purchase and the Board has resolved to proceed, the Company itself is the purchasing party and the entity whose interests the solicitor must represent. 

Key Point: When a solicitor is engaged to provide legal advice in a transaction involving a company, the client is the company itself, not its directors or parent company. The solicitor must act in the best interests of the company as the legal entity making the transaction.

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