REGARDING RETIREMENT OF PARTNER
This query is : Resolved
18 April 2025
IF ONE CA PARTNER RETIRED FROM CA FIRM THEN WHAT TO DO TO RETAIN OWN FIRM (PARTNER'S OWN INDIVIDUAL FIRM) WHETHER APPLY FOR RECONSTITUTION OR RAISE DEMERGER REQUEST?
12 August 2025
Key points:
Retirement from existing firm:
The partner must officially retire as per the partnership deed of the existing CA firm.
Notify the Institute of Chartered Accountants of India (ICAI) about the retirement.
Retaining own individual firm:
The retiring partner can continue their own individual practice as a sole proprietor or a new firm.
If this was an existing separate firm before joining the partnership, it can continue without change.
Regarding ICAI registration:
For the retired partner’s individual firm (own practice), the existing registration (if any) continues.
For the old partnership firm, if there is a change in composition (partner retiring), the firm must inform ICAI and get the partnership firm registration updated — this is called reconstitution of the firm.
Reconstitution or Demerger:
Reconstitution means change in the partnership firm composition (partner retiring, admission of new partner, change in profit-sharing ratio).
Demerger is splitting one firm into two or more separate firms with assets, clients, etc., divided.
In case the retiring partner just leaves and continues individually without dividing firm assets or clients formally, reconstitution applies.
Demerger is applicable if the retiring partner is taking a part of the firm’s assets, clients, goodwill, etc., to form a new separate firm.
If the retired partner wants to continue only their own individual firm/practice and not take any part of the existing firm’s assets/clients, then just notify ICAI about retirement and continue own firm as usual — no demerger needed. The old firm will file for reconstitution.
Retirement from existing firm:
The partner must officially retire as per the partnership deed of the existing CA firm.
Notify the Institute of Chartered Accountants of India (ICAI) about the retirement.
Retaining own individual firm:
The retiring partner can continue their own individual practice as a sole proprietor or a new firm.
If this was an existing separate firm before joining the partnership, it can continue without change.
Regarding ICAI registration:
For the retired partner’s individual firm (own practice), the existing registration (if any) continues.
For the old partnership firm, if there is a change in composition (partner retiring), the firm must inform ICAI and get the partnership firm registration updated — this is called reconstitution of the firm.
Reconstitution or Demerger:
Reconstitution means change in the partnership firm composition (partner retiring, admission of new partner, change in profit-sharing ratio).
Demerger is splitting one firm into two or more separate firms with assets, clients, etc., divided.
In case the retiring partner just leaves and continues individually without dividing firm assets or clients formally, reconstitution applies.
Demerger is applicable if the retiring partner is taking a part of the firm’s assets, clients, goodwill, etc., to form a new separate firm.
If the retired partner wants to continue only their own individual firm/practice and not take any part of the existing firm’s assets/clients, then just notify ICAI about retirement and continue own firm as usual — no demerger needed. The old firm will file for reconstitution.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability of TDS on CFS, CHA fees, and shipping line charges
- Notice from IT DEPTT IF FD AMOUNT EXCEEDS 10 LACS
- Unable to generate and save json file for updated return
- GST payable under RCM
- Applicablity on tds
- LTCG offset against property buy
- Tax audit & Switching from Presumptive taxation
- PRODUCT AND SERVICE CATEGORY CODE
- WRONGLY UPLOADED 10IF FOR COOPERATIVE SOCIETY
- GSTR9- ITC
- GST QUERY TO RAISED PROFESSIONAL FEE BILL BY CA
- Place of supply under Gst for tax audit services
- Which SAC code should be selected??
- Import purchase entry
- Rule 54(1A) for Distributing ITC
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
- GST OFFICER WRONG NOTICE
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
Trending Online Classes
-
LIVE Course on GSTR-9 & GSTR-9C (Technical | Practical | Concept - Based)
Sachin Jain03 November 2025
CAclubindia
