Comments
A Limited Liability Partnership (LLP) can now be a statutory auditor of a company, thanks to the Corporate Affairs Ministry.
The Ministry has now clarified that a LLP of chartered accountants will not be treated as ‘body corporate' for the limited purpose of Section 226(3) (a) of the Companies Act. An executive order to this effect has been issued.
This provision of Companies Act specifies that a ‘body corporate' is disqualified from appointment as auditor by a company.
The CA institute had represented to the Ministry that the Limited Liability Partnership law of 2008 specifies a LLP as a ‘body corporate'.
Hence, LLP among chartered accountants will not be qualified for appointment as auditor by a company, the CA institute had submitted.
By taking LLP out of the purview of ‘body corporate' for the limited purpose of appointment of auditor, the Government has enabled conversion of more CA firms into LLPs, say experts.
“This clarification (MCA) is a progressive step in institutionalising professional services. It is desirable that other professional regulatory bodies also follow suit thereby paving way for LLP to be an alternate vehicle of professional enterprise”, Mr Aseem Chawla, Tax Partner, Amarchand & Mangaldas told Business Line.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.