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The CA Institute has advised its members to refrain from roping in an advocate (a Bar Council member) or an actuary holding a Certificate of Practice as partner if they are setting up multidisciplinary firms.
Both the guidelines and the FAQ (frequently asked questions) prepared by the CA Institute for the implementation of multidisciplinary partnership (MDP) firms suggest this, sources said.
It maybe recalled that the CA Institute had last month notified a new form paving the way for a CA firm to register itself as an MDP, by roping in cost accountants, company secretaries, actuaries and even lawyers (the Bar Council has to approve this) as partners, and offer a variety of services under one roof.
Legal hurdle
However, there is a legal hitch in getting advocates who are members of Bar Council of India and actuaries having certificate of practice from becoming partners as the laws and rules governing them specifically prohibit them from entering into partnerships with persons of other professions.
The Bar Council of India Rules 1975 stipulates that an advocate shall not enter into a partnership of any other arrangement for sharing remuneration with any person or legal practitioner who is not an advocate.
G Sekar, Council Member and Convenor of the Group for formation of MDP firms at the Institute of Chartered Accountants of India, told BusinessLine : “Even though the CA regulation permits practising CA firm to enter into partnerships with advocates or actuaries, the guidelines specify that they shall not enter into a partnership with an advocate who is a Bar Council member or with an actuary holding Certificate of Practice because their own laws prohibit them from joining such partnerships.”
So until their laws get amended, it is not legally correct to admit them into partnership in an MDP CA firm, he said, elaborating the CA Institute decision. The CA Institute formally released the guidelines and FAQ on Friday, a month after the new form was notified. This latest move would bring cheer to the 88,000 practising chartered accountants units across the country — especially those in India interiors — who were awaiting the guidelines and FAQs with bated breadth so as to quickly start offering multidisciplinary services to their clients, sources said. The opening of multidisciplinary window would enable them to offer a gamut of financial services under one roof akin to an e-commerce marketplace.
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