Page 379 - CA Final Audit Titanium Full Book. (With Cover Pages)

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about the death of the proprietor) only upto a period of 1year from date of settlement of dispute.

(CNO-PE.1080) CLAUSE 3 Bare Text:
A Chartered Accountant in practice is deemed to be guilty of professional misconduct if he:
Clause (3): accepts or agrees to accept any part of the profits of the professional work of a person who is not a
member of the Institute. Provided that nothing herein contained shall be construed as prohibiting a member
‘from entering into profit sharing or other similar arrangements, including receiving any share commission or
brokerage in the fees, with a member of such professional body or other person having qualifications, as is
referred to in clause (2) of this part.
Rationale

Purpose of Restriction: This rule is in place to prevent Chartered Accountants from sharing fees received by
individuals who are not authorized by the Council. This is particularly important as Chartered Accountants often
need to engage or recommend the services of professionals from other fields to their clients.
Upholding Professional Standards: The restriction is necessary to maintain professional standards and ethics
in the field of accountancy.

Referral Fees
Referral Fees: It is fees obtained by a member in practice from another member in practice for referring a client
to them.
Permissibility: Charging such referral fees is not prohibited among members in practice.

(CNO-PE.1100) CLAUSE 4
A Chartered Accountant in practice is deemed to be guilty of professional misconduct if he:
Clause (4): 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.
Analysis
Prohibition: Cannot enter into partnership with persons other than specified.
Coverage: Partnerships in India or Outside India
Permitted Persons: CA in Practice, Member of Prescribed Professional Body (Indian & Professional), Persons
having prescribed qualifications.
Regulation 53B (1): Gives list of prescribed Indian professional bodies.
Regulation 53B (2): Gives guidance for list of prescribed foreign professional bodies.
Regulation 53A (3): Gives list of prescribed qualifications. This is same list as we discussed earlier.
Members under MOU / MRA: Partnerships may be permitted with residents who would be eligible for
membership under specific conditions, such as being registered under clause (v) of sub-section (1) of section 4,
or having qualifications recognized by the Central Government or the Council. (Sec 29 MOUs / MRAs)
Regulation 53B(1) List of Indian Professional Bodies
Membership with The Institute of Cost and Works Accountants of India, established under the Cost and Works
Accountants Act, 1959.
Membership with The Institute of Company Secretaries of India, established under the Company Secretaries Act,
1980.
Membership with the Bar Council of India, established under the Advocates Act, 1961.
Membership with The Institution of Engineers, or holding an Engineering degree from a University established
by law or an institution recognized by law.
Membership with The Institute of Actuaries of India, established under the Actuaries Act, 2006.
Membership with The Indian Institute of Architects, established under the Architects Act, 1972.

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