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GUIDELINES
FOR CONSTITUTION/RECONSTITUTION OF PARTNERSHIP FIRM |
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Only the members of the Institute i.e. AICWA or FICWA who have
obtained Certificate of Practice and are
engaged
in full / part time practice are entitled to constitute/reconstitute a partnership firm of Cost Accountants under Regulation
113 of the Cost and Works Accountants Regulations, 1959. For this purpose, the following procedure has to be followed
and the related conditions have to be complied with:-
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- Application has to be made to the
Central Council of the Institute
(hereinafter referred to as the Council)
in Form ‘L’, which should be duly filled
in and signed by all the partners,
indicating the name and membership no.
against each signature.
- The application should be
accompanied by a copy of Deed of
Partnership duly executed on a
non-judicial stamp paper of appropriate
value by all the partners and attested
by at least two witnesses indicating
their full names and addresses. The date
of execution of the Deed and submission
of Form ‘L’ should pertain to a date on
or after the date of purchase of the
non-judicial stamp paper.
- The date of application in Form ‘L’
and the date of the Deed of Partnership
should pertain to a current date as far
as practicable.
- The name of the partnership firm to
be indicated in sl. no. 1 of Form ‘L’
and Deed of Partnership should be in
accordance with the provisions of
Regulation 108 of the Cost and Works
Accountants Regulations, 1959 and should
not be similar to a name already
approved by the Council. Such a firm
name should have the suffix “&
Associates” or “& Co.”
- The partnership firm shall be
entitled to function with effect from
the date of approval by the Council, and
shall not have any retrospective effect.
- Prior to the approval of the
Council, the use of any stamp/visiting
card/letter head or the like in any firm
name is strictly prohibited.
- When a partnership firm is
reconstituted on account of admission,
retirement, resignation, expulsion,
death, etc. of partner(s) or change of
terms and conditions, etc., a fresh Deed
of Partnership has to be duly executed
by the existing partners, and a copy of
such Deed along with Form ‘L’ and
evidence of grounds of reconstitution
has to be submitted to the Council for
reconstitution of the partnership firm.
- No Constitution or Reconstitution of
partnership firm is valid unless it is
approved by the Council.
- The partners of a firm have to
strictly comply with terms and
conditions of the Deed of Partnership as
approved by the Council and there should
be no deviation from it.
- If there is any change in the
constitution or terms and conditions, it
has to be immediately intimated to the
Council by executing a fresh Deed of
Partnership and Form ‘L’. Any change in
the constitution and/or terms and
conditions of partnership shall have no
effect till it is approved by the
Council.
- If in the terms and conditions of
Deed of Partnership as approved by the
Council, there are certain conditions to
be complied with by the remaining
partners within a specified period of
time upon death, retirement,
resignation, etc. of partners(s) of a
firm for the purpose of its
reconstitution, the remaining partners
must comply with such terms and
conditions within the specified period
for the purpose of its reconstitution,
failing which the firm gets
automatically dissolved after the expiry
of the specified period.
If such terms and conditions are not
complied with by any partner(s), he
automatically ceases to be a partner of
the firm after the expiry of the
specified period. However, the partners
who comply with such terms and
conditions within the specified period
become eligible for reconstitution of
the firm, and they can reconstitute the
firm by submitting a fresh Deed of
Partnership and Form ‘L’ to the Council
in the prescribed manner.
If any remaining partner(s) has any
difficulty or dispute in complying with
the terms and conditions of Deed of
Partnership as indicated above within
the specified period of time for the
purpose of reconstitution of the firm,
he must communicate about such
difficulty/dispute to the Secretary of
the Institute within the period
specified in the original Deed of
Partnership as approved by the Council.
However, if there is no communication in
this regard, it shall be taken as
granted that the partners(s) not
complying with the terms and conditions
are not interested in continuing with
the firm, and upon application from the
partners duly complying with the terms
and conditions of original approved
Deed, the Council shall reconstitute the
firm without any reference to the
defaulting partner.
- When a partnership firm is
dissolved, a copy of Deed of Dissolution
of Partnership duly executed by all the
partners has to be submitted to the
Council for its record.
- Whenever there is a change in the
address of the Head Office or Branch
Office of the partnership firm, it is to
be immediately intimated to the Council
in Form ‘L’.
- The Head Office or any Branch
Office, if any, of the firm should be
headed by a person who is member of the
Institute i.e. AICWA or FICWA.
- If the partner of a firm does not
renew his Certificate of Practice, he
automatically ceases to be a partner and
the partnership automatically stands
dissolved. However, remaining partners
who are valid holders of Certificate of
Practice, can apply for reconstitution
of the firm by furnishing a fresh Deed
of Partnership and Form ‘L’ to the
Council in the prescribed manner and the
Council shall reconstitute the firm
without any reference to the defaulting
partner.
- If on account of any circumstances,
the number of partner of a firm is
reduced to one only, the partnership is
automatically dissolved. However, the
single partner may reconstitute the firm
with one or more eligible partners by
furnishing a fresh Deed of Partnership
and Form ‘L’ to the Council in the
prescribed manner, if there is a
provision in the Deed in this regard.
However no such reconstitution is
possible after the firm is dissolved.
- The name of a firm once approved by
the Council cannot be changed by the
partners.
- The name of a firm, which is
dissolved or not reconstituted, cannot
be allotted to any new applicant.
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In connection with the above guidelines, the
following conditions have been laid down for
members in part-time practice who desire to
become a partner/proprietor of firm of Cost Accountants
:
A. Any member engaged in any other business or
occupation, in terms of general or specific
Resolution passed by the Council under
Regulation 111 given as per Appendix No. 6 of
the Cost and Works Accountants Regulations,
1959, shall not be entitled to perform any
attest/certification function except in the
following cases: |
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- Maintaining books of accounts of any
commercial, non-commercial, financial,
non-financial organizations;
- Undertaking audit of any nature, not
statutorily debarred, in any commercial,
non-commercial, financial, non-financial
organizations;
- Practicing as Management Consultant;
- Practicing as Tax Consultant;
- Private tutorship;
- Authorship of books and articles;
- Holding of Life Insurance Agency License
for the limited purpose of getting renewal
commission;
- Attending classes and appearing for any
examination, academic or professional;
- Honorary office-bearership of charitable,
educational or other non- commercial
organizations;
- Acting as Notary Public, Justice of the
Peace, Special Executive Magistrate and the
like;
- Tutorship for courses under the aegis of
the Institute or of the Regional Councils;
- Valuation of papers, acting as paper
-setter, head-examiner or a moderator for any
examination;
- Acting as surveyor and Loss Assessor under
the Insurance Act, 1938;
- Acting as Recovery Consultant in the
banking sector; and
- Holding Public Elective office such as M.P.,
MLA & MLC.
- Editorship of journals other than
professional journals;
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B. A member who is not entitled to perform
attest/certification function shall not be
entitled to train any registered student of the
Institute.
C. The Council in this connection also clarified
that the attest/certification function for this
purpose would cover services pertaining to cost
audit, excise audit, other statutory matters.
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ANNEXURE: Standard Deed of Partnership |
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