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CA with part time COP joining family business - Professional ethics

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Monika

90 Points Posted on 03 February 2025

Can a CA holding part time COP & partner in a CA firm become working partner in a family run business?

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Quick Summary

This discussion explores the professional ethics surrounding a Chartered Accountant (CA) who holds a part-time Certificate of Practice (COP) and wishes to join a family-run business. While a CA can acquire an interest in a family business through inheritance or succession, they cannot actively run it or be a 'working partner' drawing remuneration. Specific application and declaration processes are required to demonstrate legitimate interest and non-active involvement.

Nikhil Kaushik

Fellow CA

86881 Points Posted on 06 February 2025

no. you cannot do that.

A member of the Institute can acquire interest in family business in any of the following manner:

a) as a proprietor of a proprietary firm.

(b) as a partner of partnership firm.

It would be necessary for the member to provide evidence that interest in the family business concern devolved on him as a result of inheritance/succession/partition of the family business. It is also necessary for the member to show that he was not actively engaged in carrying on the said business and that the family business concern in question was not created by him. The member is required to submit an application and a declaration in the prescribed format.