(Set up by an Act of Parliament)

Transcription

1 (Set up by an Act of Parliament)

2 The FAQs contained in this book have been prepared in accordance with the provisions contained in Chartered Accountants Act 1949, Chartered Accountants Regulations, 1988 and decisions of the Council and appropriate Committee. The FAQs are illustrative only and not exhaustive. Moreover, the FAQs are intended to be used as supplementary to aforesaid Act and Regulations and are not to be taken as substitute therefor. Members are advised to refer the relevant provisions of the Chartered Accountants Act and Regulations and also decisions of the Council published in Journal and hosted on Institute website from time to time. The Institute of Chartered Accountants of India. All rights reserved. mss@icai.org Website : No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission, in writing from the publisher. First Edition : 2006 Price : Rs. 100/- Published by : Dr. Ashok Haldia, Secretary The Institute of Chartered Accountants of India ICAI, Bhawan, Indraprastha Marg New Delhi , INDIA Typeset & Printed at Ushnak & Arvind Patparganj, Delhi # Tel. :

3 Contents 1. Members 1.1 Enrolment as an Associate Member Grant of Certificate of Practice Cancellation of Certificate of Practice Restoration of Certificate of Practice Removal of name of a Member Restoration of name of a member Admission as a Fellow Member Permission for other Engagements Change in name Change in Professional Address Firms 2.1 Approval / Registration of firms Merger of firms Demerger of firms Networking of firms 35 3 CPE Requirements 44 4 Post Qualification Courses 47 5 General 5.1 Online Payment of Membership Fees Online Submission of Forms Publications online 50

4 5.4 Online registration for Seminars and Conferences List of Members Journals Condonation of delay Entitlement to train articled clerks Duplicate Certificate Certificate of Good Standing Transcript Identity Cards Grievance Mechanism FAQs for Members abroad Use of Logo Website Chartered Accountants Benevolent Fund (CABF) CABF Group Protection Insurance Scheme S Vaidyanath Aiyar Memorial Fund (SVAMF) Placement Portal False representation as Chartered Accountant Penalty for using name of the Council etc Suggestions Regulatory Forms Contact office 74

5 Foreword

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7 Members 1.1 Enrolment as an Associate Member 1 What are the advantages for enrolling as a Member of the Institute? Mere passing of CA Final Examination does not confer any title to the candidates unless they enroll themselves as members of the Institute. Only members of the Institute can use the designation ACA or FCA as the case may be. As per the decision of the Council, members of the Institute may use the letters CA as prefix to their names. For practising as a Chartered Accountant, membership of the Institute is mandatory together with COP. Even for others who have passed CA Final Examination and would like to join employment, membership with the Institute is strongly advised since most of the Companies both in India and in foreign countries seek confirmation of the membership and good-standing status of the candidates likely to join the companies. Besides employment certificate of good standing of member is also insisted upon for the purpose of higher studies

8 2 Committee on Ethical Standards & Unjustified Removal of Auditors abroad, immigration, visa etc. Apart from these, The Chartered Accountant, a monthly Journal is sent to every member free of cost. Being the members of the Institute one has got the advantage of updating knowledge and be in the fraternity of C A professional by attending Seminars, Conferences organized by the Institute, its Regional Councils, branches etc. at concessional rates. 2 Who is eligible for enrolment as an Associate Member? What is the procedure for becoming an Associate Member? A person who has passed Both the Groups of the CA Final Examinations, completed 3 years of articles training under an eligible practicing member and completed a course on General Management and Communication Skills is eligible for admission as an Associate Member. He is required to apply for admission as an Associate member in form 2, pay the requisite fee towards admission and membership fees. He can submit form no. 2 for enrolment to the Decentralised Office of the Institute within whose jurisdiction his professional address falls. 3 What is the fee payable for enrolment as an Associate Member and how fee can be paid? The fees payable currently for enrolment as an Associate Member along with form 2 are as follows: - Entrance Fee : Rs. 300/- Associate Membership Fee : Rs. 300/- Certificate of Practice Fee : Rs. 800/- (optional) Life Membership Fee for CABF : Rs. 1,000/- (optional)

9 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 3 The fee can be paid by means of demand draft/banker s cheque. Fee can also be paid online and for this purpose a link of On line Payment of Fee is available on the home page of the website of the Institute. Members may follow instructions thereat and avail this facility. 4 How long a member retains his membership? A member is entitled to retain his membership so long he pays Annual Membership Fees every year, which becomes due and payable on 1st of April. At present an Associate Member is required to pay an Annual Membership of Rs. 300/- and a Fellow Member is required to pay Rs. 900/-.A member holding Certificate of Practice is required to pay Certificate of Practice fee of Rs. 800/- every year in addition to his membership fee. 5 Whether it is mandatory to pay contribution as Life Member of the Chartered Accountants Benevolent Fund (CABF)? It is not mandatory to pay Life Membership Fee of the Chartered Accountants Benevolent Fund at the time of admission as a member or thereafter. However, since the fund is utilized for helping the members in distress and also the families of deceased members in need of financial assistance, Member should contribute while applying for membership itself the life membership fee and become life member of the Fund. Those who have not become a life member of CABF should come forward to become life members for such a pious purpose. The contribution so made is exempt under the Income-tax Act. 6 Whether it is mandatory for a person applying for membership to pay Certificate of Practice Fees?

10 4 Committee on Ethical Standards & Unjustified Removal of Auditors A fee for certificate of practice is payable only when a member intends to practise as a Chartered Accountant. It is, therefore, not mandatory for a person applying for membership to pay the Certificate of Practice Fee. 7 What is the procedure for condonation of delay if the person applying for membership had pursued other course(s) during the period of articles training without prior permission of the Council under Regulation 65 and whether he or she will get the membership from the date of submission of form no. 2? The person who has pursued other course(s) during the period of articles training without prior permission under Regulation 65 is required to apply for permission post facto in form 112. He has to state the reasons for not seeking permission alongwith requisite Condonation fee. The employer is also required to recommend the case for condonation with his comments and confirmation of completion of training by the articled clerk. The request for condonation of delay in submission of form 112 is considered on merits of each case and the membership is given from the date, the delay is condoned by the competent authority or from such other date as may be specified by the Executive Committee. 8 What is the procedure for condonation of delay if the person applying for membership had been engaged as partner in a family firm(s) during the period of articles training without prior permission of the Council under Regulation 65 and whether he or she will get the membership from the date of submission of form 2? The person who had been engaged as a sleeping partner in a family firm(s) during the period of articles training without prior

11 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 5 permission of the Council under Regulation 65 is required to apply for permission post facto in form 112. He has to state the reasons for not seeking permission and alongwith requisite condonation fee. The employer is also required to recommend the case for condonation with his comments and confirmation of completion of training by the articled clerk. The following documents are also required to be submitted for consideration of the matter: - i) Certified true copy of the partnership deed containing clear recital that the applicant was a sleeping partner and he had neither taken active part nor he was entitled to take active part in the activities of the firm. ii) iii) Affidavit of all the partners including the articled/audit clerk that he had neither taken active part nor was required to take active part in the management of the business. Certificate from the employer that the training of the articled clerk was not interfered during the period of training due to above engagement. He/his firm was not the auditor of the partnership firm in which articled clerk was engaged. The request for condonation of delay in submission of form 112 is considered on merits of the each case and the membership is given from the date, the delay is condoned. 9 What is the procedure for condonation of delay if the person applying for membership had been engaged as Director in a family Company during the period of articles training without prior permission of the Council under Regulation 65 and whether he or she will get the membership from the date of submission of form 2?

12 6 Committee on Ethical Standards & Unjustified Removal of Auditors The person who had been engaged as Director in a family Company during the period of articles training without prior permission of the Council under Regulation 65 is required to apply for permission post facto in form 112. He has to state the reasons for not seeking permission alongwith requisite condonation fee. The employer is also required to recommend the case for condonation with his comments and confirmation of completion of training by the articled clerk. The company in which the articled clerk was engaged, as Director should be a family company and the substantial capital of the company should be held by the members of the family. The company should have been in existence before the articled clerk entered into articled service. Neither the principal nor the firm, in which he was engaged as articled clerk, was auditor of the company. The following documents are also required to be submitted for consideration of the matter: - i) A copy of the Memorandum/Articles of Association of the Company ii) Affidavit of the articled clerk duly sworn in before Notary/First Class Magistrate that he has neither taken active part nor was entitled to take active part in the management of the business. iii) A copy of the resolution of the company that the articled clerk was a Honorary Director of the company and had neither taken active part nor was entitled to take active part in the management of the business affairs of the company. iv) Certificate from the employer that the training of the articled clerk was not interfered during the period of training due to above engagement.

13 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 7 The request for condonation of delay in submission of form 112 is considered on merits of each case and the membership is given from the date, the delay is condoned. 10 Whether a person who is working as a Paid Assistant with a firm of Chartered Accountant or employed in some organization can obtain Certificate of Practice? Whether such disclosure in form no. 2 amounts to seeking permission of the Council? The person who is working as Paid Assistant with a firm of Chartered Accountant or employed in some other organization is eligible to obtain Certificate of Practice. Such disclosure in form 2 submitted at the time of enrolment is treated as information for the purpose of grant of permission. Simultaneously a letter is also sent to the firm seeking confirmation about his employment as paid assistant in the said firm. On receipt of confirmation entries regarding his employment as paid assistant are noted in records. In the event of a member employed in Industry, permission is generally granted if full details of employment such as name and address of the employer, post held, date from which held are given. Such member is treated as in part-time Practice and accordingly he is not entitled to attest functions 11 Is completion of G M C S course compulsory for enrolment as Associate Member? When this course can be completed? The completion of GMCS Course is a pre-condition for enrolment as a member of the Institute for those who have passed the CA Final exam under the new curriculum. An articled clerk who has passed

14 8 Committee on Ethical Standards & Unjustified Removal of Auditors Intermediate / PE-II exam and completed two year of practical training can undergo GMCS course for 15 days conducted through Regional Councils and its branches at present. 12 Whether a person who is not able to complete the course on General Management and Communication Skills being resident outside India is exempt from attending the said course and eligible for membership of the Institute? Completion of a course on General Management and Communication Skills is mandatory irrespective of the fact that the person is resident outside India. 13 Whether a person can apply for membership of the Institute if he is engaged as an Insurance Agent of LIC? There is no bar for a person engaged as an Insurance Agent to apply for membership of the Institute without Certificate of Practice. However he is required to give up the LIC Agency if he desires to obtain Certificate of Practice at the time of admission as a member. 14 Can a person who is registered and completed articles training with his address falling under the jurisdiction of one Decentralised office apply for membership of the Institute in another Decentralised office on passing the CA Final Examination? A person who has completed his articles training under a member registered with a particular Decentralised office is eligible to apply for membership in Decentralised office provided his professional address

15 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 9 falls under the jurisdiction of that Decentralised office. It is, therefore, not compulsory to apply for membership to the Decentralised office where he had completed his articles training. 15 What is the procedure for membership if the name of the person applying for membership has changed after completion of articles training and his name in the CA Final Passing Certificate is under the old name? The person whose name has changed prior to becoming member of the Institute is required to apply for membership in Form 2 in the changed name. He/she is required to produce a certified true copy of the Gazette Notification for change in name as published in the State/ Gazette of India or announcement published in the newspaper. A copy of the wedding card or marriage registration certificate is required to be submitted in the case of a female candidate if her maiden name is changed consequent upon her marriage. 1.2 Grant of Certificate of Practice 16 What is the procedure for obtaining Certificate of Practice? A member desirous to obtain Certificate of Practice should apply for grant of Certificate of Practice in prescribed form 6 and pay the prescribed Fee. If the Annual Membership Fee for the current year is due but has not been paid, the same is required to be paid. 17 Can a member engaged in business obtain Certificate of Practice? A member engaged in business is not entitled to obtain Certificate of Practice. However a member engaged in family business

16 10 Committee on Ethical Standards & Unjustified Removal of Auditors concern can obtain certificate of practice provided his interest in the business devolved upon him by inheritance/succession/partition. He is required to obtain permission of the Institute. His request for permission should be accompanied by the following documents to establish that he is a sleeping partner: - a) A declaration in the Proforma specified for the purpose b) A certified true copy of the Partnership Deed(s) evidencing that he is only a sleeping partner and that his interest in the family business and the said business was not created by him. The Institute will grant permission if the member is not actively engaged in carrying out the said business and that the family business was not created by him. 18 Can a member engaged as full-time employee in a company obtain Certificate of Practice? Is he required to obtain permission from his employer and the Institute? The member engaged as full-time employee in a company can obtain Certificate of Practice. He is required to obtain prior permission of the Institute. As regards obtaining permission from the employer is concerned, he is required to comply with the policies of the concerned company in this regard. He will be treated as a member in part time practice and accordingly he will not be entitled to attest functions. 19 Can a member of the Institute holding Certificate of practice residing outside India, do any attest functions? Yes He can do attest functions outside India, subject to the local laws permitting him to do so.

17 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 11 Members holding Certificate of Practice and employed outside India are also permitted to undertake attest functions outside India so long as they reside outside India. Their status during their stay outside India would continue to remain as part time practice. 1.3 Cancellation of Certificate of Practice 20 What is the procedure for cancellation of Certificate of Practice? Whether the Certificate of Practice can be cancelled from an earlier date? The Certificate of practice of a member can be cancelled on his own request from the date as requested by him provided the request is received within one month from such date and the member has also paid the membership and Certificate of Practice fee for the year. However, if the member desires to cancel certificate of practice from 1st April and if the request for cancellation is received within 30th April, the member is not required to pay certificate of practice fee for that year. If the request of the member is received by the Institute beyond one month, the date of cancellation of certificate of practice will be date of receipt of the request from the member in the office of the Institute. The Certificate of Practice cannot be cancelled from an earlier date. 21 What is the last date for payment of certificate of practice fee? In the event of non-payment what will be date of cancellation of certificate of practice? The Annual membership and certificate of practice fee becomes due and payable from 1st April every year and the member is expected to pay the same by 30th April every year as communicated in the Fee Circular. However the member can pay the fee latest by 30th September. In the event of a member in practice not paying the Certificate of

18 12 Committee on Ethical Standards & Unjustified Removal of Auditors Practice fee by 30th September, his certificate of practice will be cancelled w.e.f. 1st October of the year. 22 What are the consequences of cancellation of Certificate of Practice? On cancellation of COP, the firm/s in which the member was a partner will automatically be reconstituted. In case he has a proprietary firm the same will be closed. His status will be shown as a Member Not in Practice and accordingly he will not be entitled to do attest functions. In the event of his training articled clerks, if any, they will be informed about the termination of their articles with effect from the date of cancellation of Certificate of Practice of the member and advising them to re-register their articles for the balance period under eligible member(s). The member should issue service certificate in Form 109 and also inform the articled clerk concerned to re-register his articles for the balance period. 1.4 Restoration of Certificate of Practice 23 Whether the Certificate of Practice of a member can be restored retrospectively? If so, what is the procedure? Yes, a member whose Certificate of practice has been cancelled w.e.f. 1st October, on account of non-payment of Certificate of Practice Fee by 30th September of the relevant year, can apply for restoration of certificate of practice with retrospective effect (i.e. w.e.f. 1st October) by submitting form no. 101 duly filled and signed alongwith requisite C O P fee by 31st March of the relevant financial year.

19 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 13 Please note that Certificate of Practice cannot be restored from a date prior to the 1st April of the relevant year. 24 Can Certificate of Practice be restored retrospectively, If a member has paid the Certificate of Practice Fee on or after 1st October, within the relevant financial year but could not submit form no. 101 within the same year? Yes. There is a provision for condonation of delay in submission of Form 101 for retrospective restoration of COP provided the requisite fee has been paid within the relevant year. The member has to make a request for condonation and remit the prescribed condonation fee. 1.5 Removal of name of a member 25 Under what circumstances the name of the member can be removed from the Register of Members? The name of the member can be removed under the following circumstances: - i) On receipt of written request from the member provided the annual membership fees for the relevant year has been paid. No such fee is required to be paid if the member makes a request before 30th April for removal of his name from 1st April. ii) Due to non-payment of annual membership fee latest by 30th September. iii) On passing of an order for removal of name under Section 21 of Chartered Accountants Act, iv) In the event of death of a member on receipt of an intimation and a copy of death certificate from his relatives or on receipt of information from surviving partners of the firm in which he

20 14 Committee on Ethical Standards & Unjustified Removal of Auditors was partner, or on receipt of letter from office bearer of Regional Council and / or its branches. v) If the member is suffering from any disability specified under Section 8 of Chartered Accountants Act. vi) On contravention of provisions of Regulation 187 with regard to non-supply of information relating to professional address after giving him an opportunity of being heard. 26 How a member will come to know about removal of his name? On the happening of any of the circumstances explained in question no. 25 above, membership shall cease, and to inform the same a letter of removal of name of the member will be sent to his professional address. A copy of notification published in the Gazette of India will be sent to him and in the case of removal of name due to death of member, the letter/ notification to the effect will be sent to the legal heir of the deceased member. 1.6 Restoration of name of a member 27 What is the procedure for restoration of name of a member? The member whose name has been removed is required to apply for restoration of name in prescribed form no. 9 duly filled and signed by him along with the following fees. a) Membership fee for the year in which his name was removed. b) Membership fee for the year in which restoration is being sought. c) Restoration fee of Rs. 100/-. d) Certificate of Practice Fee (if he intends to hold).

21 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 15 The name of the member would be restored from the date of receipt of form no. 9 together with requisite fees. 28 Whether the name of the member can be restored retrospectively? The name of the member can be restored with retrospective effect within the relevant year (i.e. from the date of removal due to non payment of fee) provided an application for restoration in form no. 9 along with membership fees and certificate of practice fee (if he intends to hold) and restoration fee of Rs. 100/- is received within the same year in which his name was removed, latest by 31st March. 29 If a member has paid membership fee and restoration fee within the relevant financial year but could not submit form no. 9 can his name be restored retrospectively? Yes. There is a provision for condonation of delay in submission of application for restoration (Form 9) of a name retrospectively in the Register of Members provided the requisite fee has been paid within the relevant year. The member has to make a request for condonation and remit the prescribed condonation fee. 1.7 Admission as a Fellow Member 30 Who is eligible for admission as a Fellow Member? An Associate Member holding membership of the Institute for a continuous period of 5 years is eligible for admission as a fellow member on his fulfilling any of the following requirements :- i) Being employed in an Educational Institution approved by the Council or in a Private or Government, Industrial, Commercial

22 16 Committee on Ethical Standards & Unjustified Removal of Auditors or Trading Undertaking, Statutory authority or under a local authority holding or has ordinarily held for a continuous period of not less than 5 years anyone or more posts carrying duties relating to accounts, cost accounts, audit, finance, taxation, company law and or secretarial work. ii) iii) Has served for a continuous period of not less than 5 years as a full-time paid assistant under a chartered accountant. Has been partly in practice and partly in service so that the total period of practice and/or service shall be continuous and be not less than 5 years. For the purpose of reckoning the period of service the organization in which the member has served shall have at all material time a minimum paid up capital of Rs. 25 lakhs or a minimum turnover of Rs. 50 lakhs or a minimum paid up capital of Rs. 10 lakhs and a minimum turnover of Rs. 30 lakhs or a minimum total asset of Rs. 50 lakhs. 31 Whether break in service or practice can be condoned for the purpose of Fellow Membership if the total period is more than 5 years? As stated in question no. 30 above an Associate Member partly in practice and partly in service is eligible to become a fellow member. A break in continuity of service or practice for a period not exceeding one year may be condoned, so however, that the actual period of service or practice shall not be less than the period of 5 years. 32 What is procedure for becoming a Fellow Member? An Associate Member who fulfills the criteria stated in question no. 30 may apply for fellowship by submitting prescribed form no. 3 duly filled in and signed. He is also required to submit Form 6 duly

23 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 17 filled in and signed in case he intends to hold Certificate of Practice. He is required to pay the following fees: - i) Admission Fee : Rs. 200/- ii) Fellow Membership Fee : Rs. 900/- iii) Certificate of Practice Fee : Rs. 800/- (if he intends to hold) A member, who has already paid the membership fee for the year as an Associate, is required to pay balance membership fee of Rs. 600/- and fellow admission fee of Rs. 200/-. In case the member applies for admission to fellowship on the basis of his employment, he is further required to submit service certificate(s) from the employer(s) mentioning the date of joining/leaving, nature of duties performed and post(s) held and also certificate(s) from the company (ies) regarding paid-up capital, turnover and total assets for the relevant period of 5 years. A member can apply for admission as a fellow member 30 days prior to completion of 5 years of continuous practice or employment with the requisite form(s) and fees. 33 Whether a member is eligible to become Fellow on completion of 5 years practice as a Company Secretary or a Cost Accountant? An associate member is not generally eligible to become a Fellow member of the Institute if he has been in practice as Company Secretary or Cost Accountant for the period of 5 years or more. The cases of this nature are however, required to be considered and decided by the appropriate Committee of the Council on case-to-case basis and on merits. If the member was in service for part of the period and

24 18 Committee on Ethical Standards & Unjustified Removal of Auditors partly he has been in practice as Cost Accountant or Company Secretary the position as clarified above stands. 34 Whether an Associate Member employed in Industry abroad is eligible to become fellow member? An associate member serving in an industry abroad for a continuous period of not less than five years in one or more posts carrying duties relating to accounts, cost accounts, audit, finance, taxation, company law and or secretarial work, is eligible to apply for fellowship by following the procedure laid down in question no Whether a member s service as a paid assistant outside India with a firm of chartered accountants can be recognized for the purpose of fellowship? The member working as a paid assistant with a firm of accountants outside India is eligible for admission as a fellow member provided the firm is having at least one partner who was either the member of the ICAI or who was eligible to become its member under Section 4(1)(v) of the Chartered Accountants Act Whether an Associate Member of the Institute practicing abroad is eligible to become Fellow Member? No. Only members being Associates and have been in continuous practice in India for at least five years are eligible to apply for admission to fellowship on payment of prescribed fee and submission of Form 3 as per Section 5(3) of the Chartered Accountants Act, 1949.

25 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS Permission for Other Engagements 37 Whether a member holding Certificate of Practice can engage as Managing Director /Executive Director/Whole Time Director of a Company? Whether he is required to obtain permission of the Council? A member holding Certificate of Practice can engage as Managing Director/Executive Director/Whole Time Director of a company. He is required to obtain permission under Regulation 190(A). The Council permits such engagement provided the member and/or his relatives do not hold substantial interest in the company. In all such cases he will be considered as member not engaged in full-time practice. 38 Whether a member holding Certificate of Practice can engage as Director (Director Simplicitor) and whether he is required to obtain permission of the Council? A member holding Certificate of Practice can engage as Director (Director Simplicitor) in a company, which means that a) he is required to attend the Board meetings only; b) he will not be paid any remuneration except the sitting fees for attending the Board Meetings; and c) he will be devoting his time for the company only to attend Board Meetings and not for any other purpose. He is not required to obtain specific permission of the Council. 39 Whether a member in practice can be Promoter/ Promoter Director, subscriber to the Memorandum and Articles of Association?

26 20 Committee on Ethical Standards & Unjustified Removal of Auditors A member in practice can be Promoter/Promoter Director, Subscriber to the Memorandum and Articles of Association of a company. The member is not required to take specific permission of the Council. 40 Whether a member in practice is required to take permission of the Council for pursuing other course(s)? Can a member pursue CFA Course conducted by The Institute of Chartered Financial Analyst of India? The member in practice is not required to take permission of the Council for pursuing other course(s). As regards pursuing CFA Course is concerned, the Council of the Institute issued notification specifying that a member of the Institute, whether in practice or not, shall be deemed to be guilty of professional misconduct if he becomes a member of The Institute of Chartered Financial Analyst of India on or after or having already become a member of the said Institute earlier, does not surrender his membership before the said date. 41 Whether a member in practice can engage as a sleeping partner in family business? Whether the member is required to obtain permission for such engagement? A member in practice can engage as a sleeping partner in family business. He is required to obtain permission of the Council. It would be necessary for the member to provide evidence that interest of the family business devolved upon him as a result of inheritance/succession/partition of the family business and he would not be actively engaged in carrying out the business and the business of the family was not created by him. He is required to submit an application and a declaration in the prescribed format.

27 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS Can a member holding Certificate of Practice engage as a partner in a business firm? The member holding Certificate of Practice cannot engage himself as a partner in a business firm except as a sleeping partner in family business as provided in Question No Whether a practicing member can act an LIC Agent? The practicing member is not permitted to act as LIC Agent. A member is permitted to collect renewal commissions for the business earned prior to commencement of practice. 44 Whether a member in practice can render services as Insurance Financial Advisory Services under the Insurance Regulatory & Development Authority Act, 1999 including Insurance Brokerage within the definition of Management Consultancy & Other Services? Whether permission of the Council is required? The Council of the Institute has permitted a chartered accountant in practice to render entire range of Management Consultancy and Other Services the definition of which is appearing at pages 8-10 of Code of Ethics, January 2001 edition and decided that the Insurance Financial Advisory Services under the Insurance Regulatory & Development Authority Act, 1999 including Insurance Brokerage be included within the said definition. Accordingly, the member in practice can render services as Insurance Financial Advisory Services under the Insurance Regulatory & Development Authority Act, 1999 including Insurance Brokerage within

28 22 Committee on Ethical Standards & Unjustified Removal of Auditors the definition of Management Consultancy & other Services. He is not required to obtain specific permission of the Council. 45 Whether a member who is treated as member in parttime practice is eligible to do attest functions? Whether he can be proprietor/partner of a firm of chartered accountants? A member who is treated as a member in part-time practice is not eligible to do attest functions. He can be the proprietor/partner of a firm of chartered accountants. 46 Whether a member in practice who has also passed final examination of Institute of Company Secretaries of India (ICSI) can be permitted to undergo practical training under Regulations of ICSI for obtaining membership of ICSI? A member in practice can be permitted to undergo the prescribed period of practical training under Regulations of ICSI for the purpose of obtaining the membership of ICSI provided this does not involve his becoming an employee of the organization where he receives training. Further such training would not affect his main occupation for the purpose of training articled clerks. The articled clerks already undergoing training under him should be sent for training under another member in practice under the secondment scheme of the Institute so that their training is not affected. 47 Whether a member can simultaneously practice as chartered accountant and also as an Advocate? A Member of the Institute in practice, who is otherwise eligible, may practice as an Advocate subject to his getting the permission of

29 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 23 Bar Council of India. But a member in practice is prohibited from using any designation other than Chartered Accountant under Section 7 of the Chartered Accountants Act In view of this provision he cannot use both the designations viz. Chartered Accountant and Advocate simultaneously. Though he cannot designate himself as an advocate he can use the letters LLB/BL after his name when he has qualified for the degree in Law. 48 Can a member in practice obtain Certificate of Practice from Institute of Company Secretary of India (ICSI) or Institute of Cost Accountants of India (ICWAI)? There is no prohibition for a member of the Institute to obtain a Certificate of Practice from ICSI or ICWAI. 49 Can a member practicing outside India impart articles training under Chartered Accountants Act and Regulations? Under the provisions of the Chartered Accountants Act, 1949 and Regulations 1988 a member practising outside India is not eligible to impart articles training to articled clerks. However, if a firm of chartered accountants has an office in India and also an office abroad (not being a separate partnership) a partner or the proprietor thereof would be permitted to train articled clerks in India or outside the country, provided that the member concerned could ensure that proper training, in accordance with the requirements of the Regulations, is imparted to the articled clerks. 50 Whether a member in practice can engage as Lecturer in University, Educational Institution, and Coaching Organization and in private tutorship? Is he required

30 24 Committee on Ethical Standards & Unjustified Removal of Auditors to obtain permission of the Council? Whether he will be treated as a member in full-time practice or parttime practice? The member in practice can engage as Lecturer in University, Educational Institution, and Coaching Organization and in private tutorship. He is required to obtain specific permission of the Council under Regulation 190(A). He will be treated as a member in full-time practice if the direct teaching hours devoted to such activities taken together do not exceed 25 hours a week. 51 Whether a member in practice can run a coaching center? Whether he will be treated as a member in full-time practice? A member in practice is not permitted to run coaching center. The member is required to surrender certificate of practice before starting the coaching center. The question of treating the member in full-time practice in such circumstances does not arise. 52 Whether a practising member can render Management Consultancy and other services? The member in practise can render Management Consultancy and other services in terms of resolution passed by the Council under Section 2(2)(iv). The member is requested to refer pages 8-11 of Code of Ethics, January 2005 edition Change in Name 53 What is the procedure for noting the change in the name of a member in the records of the Institute? If there is change in name the member concerned is required to comply with the following procedure: -

31 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 25 a) In case of female member on marriage Application for change in name should be submitted alongwith a copy of marriage invitation card or attested copy of marriage registration certificate or an affidavit duly sworn in before a first class magistrate/notary public as the case may be. b) In the case of other members Application for change in name should be submitted alongwith an attested copy of Gazette Notification or original copy of advertisement in a leading Newspaper for change of name or an affidavit for change in name duly sworn in before a first class magistrate/notary public as the case may be Change in Professional Address 54 Whether it is compulsory for a person to give his professional address? What is the significance of professional address? As per Regulation 187 every member in practice shall have a professional address in India. A member not in practice is also required to specify a place, which shall be deemed to his professional address for the purpose of Section 21. In case of a member who is an employee of a chartered accountant or firm of chartered accountant and is not holding Certificate of Practice, the professional address of the employer shall be deemed to be his professional address. All correspondence with the members will be made by the Institute at the professional address only. Annual Fee Circular, Regional Newsletter, Journal and other information relating to Seminars, Conferences etc. will be sent to the members at their professional address.

32 26 Committee on Ethical Standards & Unjustified Removal of Auditors As the professional and other particulars are critical requiring due caution the request for changes therein needs to be accompanied under the signatures of the member so as to ensure authenticity of such a request. 55 What is the procedure for change in professional address of a member? Whether the professional address of the member and the address for communication could be different? The member is required to submit a written request duly signed by him informing about the change in his professional address within 30 days of the change. In case the new professional address of a member falls in other region the request should be submitted to the Heads of the Decentralised Offices of that region as well as the previous region. The professional address of the member and the address for communication cannot be different and only professional address will be used for the purpose of communication by the Institute. 56 Can a member give an address different from his professional for the purpose of getting Journal of the Institute? As per regulation 187 of CA Regulations every member in practice shall have a professional address in India in his own charge or in charge of another member. A member not in practice may specify a place, which shall be deemed to be his professional address for the purpose of Section 21 and also CA Regulations. In view of the above, every member has to specify one address, which will be taken in the Institute s record as professional address for all purposes and also for correspondence. Accordingly Journal, Regional Newsletters etc. would be sent to the professional address only as indicated by the member.

33 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 27 Firms 2.1 Approval/Registration of Firms 57 What is the procedure for approval and registration of a firm? The member(s) is/are required to apply in Form 117 to Head Office at New Delhi for approval of trade/firm name. The detailed guidelines for selecting firm name are printed on overleaf of Form 117 for ready reference to the members. The proposed name will be approved under the provisions of Regulation 190 in the order of preference mentioned in Form 117 subject to name availability. The approval is given by the HO and communicated to the Proprietor / partner who makes the request or Senior partner of the proposed firm. An existing firm desirous of changing the name of the firm may apply in Form 117 signed by all partners of the firm alongwith written request for change firm name by following the guidelines for selecting the firm name. The member(s) is/are required to submit form no. 18 alongwith the copy of the approval letter to the Decentralised Office as indicated in

34 28 Committee on Ethical Standards & Unjustified Removal of Auditors approval letter for registration of the firm within one month from the date of approval of the firm name. The Decentralised office would issue a letter to the firm confirming the registration of the firm. 58 Can a member holding Certificate of Practice outside India be a partner in a CA firm in India? The member holding Certificate of Practice and residing outside India can be a partner in a CA Firm in India. 59 Can a member become incharge of Head Office as well as Branch office of the firm? The member cannot become incharge of Head Office as well as branch office of the firm since each and every office of the firm should be under the charge of a separate member as required under Section 27 of the Chartered Accountants Act Can a member or firm have a second office? A member or a firm of chartered accountant in practice can have a second office without such second office being under the separate charge of a member of the Institute provided: - a) The second office is situated in the same premises in which the first office is located; or b) The second office is located in the same city in which the first office is located; or c) The second office is located within a distance of 50 kms from the Municipal limits of a city in which the first office is located The member having two offices shall have to declare which of the two offices is his main office, which would constitute his professional address.

35 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS Whether a firm can open a branch office outside India? A firm can open a branch office outside India. The firm is required to intimate about the opening of branch office with the details e.g. branch address of the firm outside India, name and membership number of the member who is incharge of the branch, and in what capacity he is associated with the firm i.e. whether he is a partner or full-time paid employee of the firm. The intimation should be signed by authorized partner or member incharge firm and submitted within one month of opening of the said office. The entry of branch office outside India is not published in the List of Firms. 62 Can a member outside India retain his proprietary firm? As per Section 27 of the Chartered Accountants Act 1949 each office of firm of chartered accountant in India shall be under the separate charge of the member of the Institute. A member working abroad can have a proprietary firm in India provided the member is actively associated with the firm in India. Such association shall be deemed to exist if the member resides in the place where the firm is situated for a period of not less than 182 days in a year or if he attends the said firm in India for a period of not less than 182 days in a year or in such circumstances as, in the opinion of the Executive Committee, established an active association. Alternatively, he can engage a member of the Institute as a paid assistant to be incharge of his firm in India. If either of these conditions is not satisfied the member is not permitted to retain his proprietary firm in India. 63 Whether the firm is required to submit form no. 18 for changes taking place in the firm due to i) Joining/leaving of paid assistant

36 30 Committee on Ethical Standards & Unjustified Removal of Auditors ii) Opening or closing of branch office iii) Change in Incharge of the HO or Branch Office(s) iv) Closure of Firms (to be signed by all the partners) v) Change in address of HO or Branch Office(s)? The firm is not required to submit form 18 for changes taking place in the firm on account of any of the above circumstances. Instead the member incharge of the firm is required to submit a letter intimating about changes taking place in the firm except in the case of closure of the firm within one month from the date of such changes. In the case of closure of the firm the letter should be signed by all the partners of the firm at the time of closure indicating the date of closure of the firm. 64 Whether the reconstitution of a firm in the event of existence of a dispute between partners of the firm can be noted in the records of the Institute? In the event of dispute between the partners of the firm the particulars of re-constitution of the firm as intimated in the form 18 cannot be noted by the Institute. Under such circumstances the Institute will take note of existence of dispute between the partners, maintain the status quo of the firm and indicate the existence of dispute in the firm constitution certificate in the manner approved by the Council. The subsequent changes are also not taken on record. 65 What is the procedure for registration of a new firm name which is similar to an existing firm? The member/s proposing a new firm name which is identical/ same or similar to an existing firm name is/are required to apply for approval of firm name in form no The form should be signed by

37 FREQUENTLY ASKED QUESTIONS FOR MEMBERS & FIRMS 31 all the partners proposing the identical/same or similar firm name, out of them atleast one of such partners should be a partner of the existing firm. This means that there must be a common partner between the existing and a new firm. They are also required to submit the NOC from all the existing partners of firms giving no objection to the use and approval of the similar firm. After the approval the particulars of firm in form no. 18 should be submitted to the concerned Decentralised Office indicated in the approval letter. The registration is given effect prospectively and not retrospectively. All such firms with identical/same or similar name should be treated as new firms. 66 Whether a practicing member can take over the goodwill of an existing firm consequent to death of the proprietor of the firm? The practicing member can take over the goodwill of an existing firm consequent to death of the proprietor. He is required to comply with the procedure laid down for this purpose within one year of the death of the proprietor. 67 What is the procedure for transfer of goodwill? The member is required to submit to the concerned Decentralised Office an application expressing his intention to purchase goodwill within one year from the date of death of the concerned member. The application should be accompanied by a copy of death certificate, a draft sale/transfer deed indicating clearly payment/mode of payment of consideration which should be contingent upon future profit, succession/legal heirship certificate, no objection from other legal heirs if the agreement is entered by one of the legal heirs and a copy of the advertisement given by the member expressing his intention to