Sleeping partner -a definition


25 March 2019  

M/s Sharma and Varma is one of the leading Chartered Accountants firms, practicing for more than two decades. In the firm there are two partnes named CA Rajath Sharma and CA Manoj Varma. A large number of Articles Trainees (CA students), Paid assistants and Senior Audit staff are also working in the firm.

A new student named Appu joined the firm as an Article trainee, to pursue Chartered Accountancy examination, after completing his B.Com. After completing his nine months of article ship training in the firm, he was eligible for appearing for Intermediate Examination conducted by the ICAI, New Delhi, scheduled to be held in the month of November.

His principal CA Varma sir, had agreed to give study leave for a month for appearing for single group and put a condition to complete all the tax audits assigned to him by the end of September. But, due to his bad luck due date for Tax Audit was postponed to 31st October and consequently all audit works delayed by one month. Appu could not take exam leave, as he could not finish his audit assignments before 30th September.

He had decided not to appear for November examination and decided to skip the attempt. He told the same to one of his principal Mr. Varma. But, Varma advised him not to skip the attempt and told "appearing for CA examination is most important than passing the exam. Don't skip the attempt. You are having some practical experience in our office in audit and taxation. Still you are left with one week time. Just study whatever you can and appear for the exam. Answer whichever question you like and while answering a question apply some common sense. Some times it may click. If you fail, don't worry. Failing in CA exam is very common. If you fail three or four times in the exam means, you are studying those subjects that many times and you will become practically strong. That's the reason our institute is making very strict valuation of answer papers. Therefore, don't skip the exam, appear and write to gain the experience, which will help in the next attempts"

Finally, Appu reluctantly agreed to appear for the CA Intermediate exam, without having any hopes for succeeding in the exam. He appeared for only one group and after completion of the examination he returned back to office. Varma Sir asked about his performance in the exam and Appu frankly told "no hopes of passing the exam, sir. I have just appeared and answered some questions applying my common sense." Varma Sir said "ok, don't worry, hope for the best".

After two months, the results were declared and as expected Appu failed in the exam and he decided to forget the past and instead think about the next exam to be held in May, like all his other colleagues. But, Varma Sir takes too much care of all the students who are undergoing training in the firm. As usual he asked all the students to apply for copy of Answer sheets of all the papers, to guide the students for better preparation in the future examinations. After 15 days scanned copies of all the answer sheets were received through mail. 

Varma Sir checked the answer sheets of all the Article students of the firms and highlighted the general mistakes made by each students while answering the questions. He gave useful tips to the students for the forthcoming exams, while answering the questions.

Finally he started to check the answer sheets of Appu and opened the first answer sheet: 

One Question was "Define Working Partners and sleeping Partners, with Examples"

Appu had answered the question like this:
"Working partner means a partner in a firm, who is always inclined to work in the business or profession. Sleeping partner is a partner of the firm, who is sleeping in the office for most of the time.
Example: Sharma Sir in our firm M/s Sharma & Varma Associates, is a working partner, as he is active in the office for most of the time and Varma Sir is a sleeping partner, as he is sleeping in the office for most of the time."

Other Question was. "What is PAN? When PAN is mandatory? What is consequences of having more than one PAN?"

Answer written by Appu is like this: .

PAN is a delicacy prepared using the Betel leaf, Betel nut and lime. Some people also prefer to add Tobacco leaf in it. 

For some persons like Sharma Sir, it is mandatory to have a PAN after their lunch. 

Consequences of having more than one PAN will differ from person to person. Some people may feel giddiness while having more than one and some may not have any effect on them."

That was the last!! 
After that, CA Varma Sir, never asked his students to apply for copy of the Answer Sheets !!!