Whether profit percentate taken into consideration for count

CA 365 views 3 replies

CA Adarsh Madrecha

Chartered Accountant

200 Points Joined April 2010

Suppose there is a CA Firm with 4 Partners. having equal profit sharing ratio.

They have 2 more CA, who are in full time employment with this fitm. Now for the Audit purpose they want to show these 2 CA as their Partner, giving them 1% share in the Partnership firm.

Will these 2 newly joined CA, will be considered as Partner for Audit Allotment Purposes.

This Question, is in reference to the fact that, many a times (Like bank Audits or CAG, RBI) see the number of Partners in a CA Firm for alloting Audit. So, will introducing a Nominal partner (by giving him a miniscule of profit) help in higher rankings? for these Audit?

Replies (3)

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

Foremost thing to be done is to check the partnership deed to ensure that the ones in full time employment are to be considered as partners or not. Because this is the basic document theat teh authorities would inspect to find out the number of partners.

also under the CA act a person who is in full tiem employment elsewhere is not considered for the purpose of allotment of audits.