16 November 2007
Dear All, I am a partner in a CA firm. I want to start a company - consultancy company. I got the following option.
1. Start XYZ Pvt. Ltd. and the share holders will be non related members. I will hold the director ship of that company and i will give the consultancy as and when required.
2. Start XYZ Pvt. Ltd. and i will a consultancy to that company. ( No connection between me and that company)
Pl. guide me can i do this within the boundaries of ICAI Act. I also want to continue my practice under a partnership firm. Pl. guide me about the other options also.
16 November 2007
As for Directorship is concerned, the ICAI permits you to do so provided prior and specific approval should be obtained from the ICAI.
You can continue your practice as well as be the director of the company. But as for expressing opinion or certification, you cannot independently act as a CA because you are interested as Director of that company.
If you want to give consultancy only, better stay away from directorship and offer consultancy.
16 November 2007
AS SRI RAVI SAID RIGHTLY, YOU MAY BECOME DIRECTOR WITH ICAI PRIOR WRITTEN PERMISSION, BUT YOU CANNOT BE AUDITOR OF THE UNIT. YOU MAY ALSO CONTINUE IN PRACTICE. CONSULT OR BE CONSULTED . NO PROBLEM. BUT DONT LEND YOUR NAME AS CONSULTANT WHERE YOU ARE DIRECTOR.YOUR WIFE/RELATIVE CAN ALSO BE CONSULTANT TO GIVE A REPORT SIGNED. I REPRODUCE BELOW ICAI CODE OF EHICS FOR YOUR AND OUR CLUB MEMBERS INFO. Clause (11) - Practising member prohibited from engaging in any business or occupation other than the profession of chartered accountants unless permitted by the Council so to engage, except being a director of a company, unless he or any of his partners is interested in such company as an auditor Regulations 190A Chartered Accountant in practice not to engage in any other business or occupation 191 Part-time employments a Chartered Accountant in practice may accept Appendix (9) - Chartered Accountants Regulations, 1988 (2002 edu.) (A)Permission granted generally (B) Permission to be granted specifically --- - Director of a Company - Promoter/Promoter-Director Clause (b) - Member in employment of any company, firm or person prohibited from accepting or agreeing to accept any part of fees, profits or gains from a lawyer, a chartered accountant or broker engaged by such company, firm or person or agent or customer of such company, firm or person or agent or customer of such company, firm or person by way of commission or gratification --- 176 THE SECOND SCHEDULE
Clause (4) - Practising member prohibited from expressing his opinion on financial statements of any business or any enterprise in which he, his firm or a partner in his firm has a substantial interest, unless, he discloses the interest also in his report --- 197 (1) Where the member, his firm or his partner or his relative has substantial interest in the business or enterprise (i) An enterprise/concern of a member is either an owner or a partner --- 199 (ii) Where the partner or relative of a member has substantial interest --- 199 (2) Where the member or his partner or relative is a director (i) Where a member is a director --- 200 (ii) Where a partner or relative of the member is a director in the Company who has a substantial interest R.V.RAO
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