Page 379 - CA Final PARAM Digital Book.

Part II -- Requirements of Relevant Laws
➢ Clause (4) of Part I of the First Schedule to the Chartered Accountants Act, 1949
A chartered accountant will be guilty of professional misconduct if he enters into partnership with
any person other than
• a chartered accountant in practice or
• Member of any other body having prescribed qualifications
• a person resident outside India who but for his residence abroad would be entitled to be
registered as a member under Clause (v) of Sub-section (1) of Section 4 or
• whose qualification are recognized by the Central Government or the Council for the
purpose of permitting such partnership.

➢ Regulation 53B of the Chartered Accountants Regulations, 1988
A Chartered Accountant in practice to enter into partnership with other prescribed Professionals
which includes an Advocate, a member of Bar Council of India.
Part III – Case Discussion
➢ In the instant case, Mr. P, a chartered accountant, has entered into partnership with Mr. L, an
advocate.
Part IV – Conclusion
➢ Thus, he would not be guilty of professional misconduct as per Clause (4) of Part I of First Schedule
read with Regulation 53B.

QNO First Schedule, Part I, Cl 4 Partnership with Non-CA’s Old Course – (M15E, PM17)
666.000 TITANIUM CNO – PE.1100 / PE.1280
A Chartered Accountant having CoP entered into partnership with persons, who are not the members of
the institute, for the purpose of carrying on business. The share of the chartered account in the profit
and losses was 25%. He was to take part in the business and was entitled to represent the firm before
Govt. authorities etc. He was operating the bank account of the firm, was receiving moneys from the
customers and was also looking after the affairs of the Partnership.

Answer Part I -- Relevant Laws
▪ Clause (4) of Part I of First Schedule to the Chartered Accountants Act, 1949

▪ Clause (11) of Part I of First Schedule to the Chartered Accountants Act, 1949
Part II -- Requirements of Relevant Laws
➢ Practicing CA Entering into Partnership and Carrying on Business:
As per Clause (4) of Part I of First Schedule to the Chartered Accountants Act, 1949, a Chartered
Accountant in practice is deemed to be guilty of professional misconduct if he enters into
partnership, in or outside India, with any person other than Chartered Accountant in practice or
such other person who is a member of any other professional body having such qualifications as
may be prescribed, including a resident who but for his residence abroad would be entitled to be
registered as a member under clause (v) of sub-section (1) of section 4 or whose qualifications are
recognized by the Central Government or the Council for the purpose of permitting such
partnerships.

It may be noted that the Council has prescribed the list of persons qualified and the professional
bodies for the purpose of entering into partnership under the Chartered Accountants Regulations,
1988.

➢ Clause (11) of Part I of First Schedule to the Chartered Accountants Act, 1949
A Chartered Accountant in practice shall be deemed to be guilty of professional misconduct if he
engages in any business or occupation other than the profession of chartered accountant unless
permitted by the Council so to engage.

It may also be noted that a member in practice is required to apply for specific and prior approval
of the Council for entering into any business.

Part III – Case Discussion
➢ In the given case, a chartered accountant in practice has entered into partnership with persons who
were not the members of the Institute, for the purpose of carrying on business.

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