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MDP - Guidelines for LLPs of CA, CS & CMAs soon
PrintRepresentatives of the professional bodies for Chartered Accountants (CAs), company secretaries and cost accountants will soon get a chance to work together in a limited liability partnership (LLP) firm offering a variety of services to their clients.
The three professional bodies are in the last lap of finalising guidelines to allow multi-disciplinary partnerships (MDP) among its members so that the new LLP of professionals becomes a reality. “The new guidelines would become operational before Diwali this year,” ICSI president Atul H Mehta said.
“The representatives of the three professional bodies met in Indore last month where it was agreed that all our members would be allowed to form LLPs under the guidelines,” he added.
LLP combines the benefits of a limited liability company with the flexibility of a partnership firm. Although LLPs were allowed in 2008 through a law, accountants and company secretaries could not form MDPs because of regulatory hurdles. There were also risks related to conflict of interest of one entity providing both auditing and consultancy services.
Parliament in December 2011, however, passed amendments to the three laws governing these institutes, allowing them to form MDPs. But the operation of such LLPs has not taken off in the absence of a clear understanding between the three bodies and a code defining `dos and don’ts’ for its members.
The proposed LLP of professionals would bring functions such as audit, accounting, tax, legal and business consulting services under one roof offering clients the flexibility for hiring one agency for multiple work requirement.
The need for a clear agreement on it is being felt as the practising members of the three professions allege each other of intruding into their regulated domain. “While a practising chartered accountant working on company laws can take up some of the corporate law work, the regulatory guidelines do not fully permit him to bypass the role of a CS. At certain places, according to the law, a CA cannot do the work of a CS,” said Mehta.The MDP model is popular in countries including the UK, Germany, Italy, the Netherlands, Slovak Republic, Spain, France and Belgium.
The three professional bodies are in the last lap of finalising guidelines to allow multi-disciplinary partnerships (MDP) among its members so that the new LLP of professionals becomes a reality. “The new guidelines would become operational before Diwali this year,” ICSI president Atul H Mehta said.
“The representatives of the three professional bodies met in Indore last month where it was agreed that all our members would be allowed to form LLPs under the guidelines,” he added.
LLP combines the benefits of a limited liability company with the flexibility of a partnership firm. Although LLPs were allowed in 2008 through a law, accountants and company secretaries could not form MDPs because of regulatory hurdles. There were also risks related to conflict of interest of one entity providing both auditing and consultancy services.
Parliament in December 2011, however, passed amendments to the three laws governing these institutes, allowing them to form MDPs. But the operation of such LLPs has not taken off in the absence of a clear understanding between the three bodies and a code defining `dos and don’ts’ for its members.
The proposed LLP of professionals would bring functions such as audit, accounting, tax, legal and business consulting services under one roof offering clients the flexibility for hiring one agency for multiple work requirement.
The need for a clear agreement on it is being felt as the practising members of the three professions allege each other of intruding into their regulated domain. “While a practising chartered accountant working on company laws can take up some of the corporate law work, the regulatory guidelines do not fully permit him to bypass the role of a CS. At certain places, according to the law, a CA cannot do the work of a CS,” said Mehta.The MDP model is popular in countries including the UK, Germany, Italy, the Netherlands, Slovak Republic, Spain, France and Belgium.
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