Act 003 of 2012 : Chartered Accountants (Amendment) Act, 2011

Preamble

Chartered Accountants (Amendment) Act, 20111

[Act 3 of 2012, Repealed by Act 23 of 2016*][8th January, 2012]

An Act further to amend the Chartered Accountants Act, 1949

Be it enacted by Parliament in the Sixty-second Year of the Republic of India as follows-

1. Received the assent of the President on January 8, 2012 and published in the Gazette of India, Extra., Part II, Section 1, dated 9th January, 2012, pp. 1–2, No. 3

* Ed.: Act 3 of 2012 repealed by Act 23 of 2016, S. 2 & Sch. I. See also S. 4 of the Repealing and Amending Act, 2016:

"4. Savings.- The repeal by this Act of any enactment shall not affect any other enactment in which the repealed enactment has been applied, incorporated or referred to;

and this Act shall not affect the validity, invalidity, effect or consequences of anything already done or suffered, or any right, title, obligation or liability already acquired, accrued or incurred, or any remedy or proceeding in respect thereof, or any release or discharge of or from any debt, penalty, obligation, liability, claim or demand, or any indemnity already granted, or the proof of any past act or thing;

nor shall this Act affect any principle or rule of law, or established jurisdiction, form or course of pleading, practice or procedure, or existing usage, custom, privilege, restriction, exemption, office or appointment, notwithstanding that the same respectively may have been in any manner affirmed or recognised or derived by, in or from any enactment hereby repealed;

nor shall the repeal by this Act of any enactment revive or restore any jurisdiction, office, custom, liability, right, title, privilege, restriction, exemption, usage, practice, procedure or other matter or thing not now existing or in force."

SOR Statement of Objects and Reasons

Prefatory Note-Statement of Objects and Reasons.-The Chartered Accountants Act, 1949 has been enacted to make provision for the regulation of the profession of the chartered accountants. The said Act was amended in 2006 by the Chartered Accountants (Amendment) Act, 2006, inter alia, to enable the members of the Institute of Chartered Accountants of India to form multi-disciplinary firms and offer multi-professional services in a competitive and commercial manner.

2. Subsequently, the Limited Liability Partnership Act, 2008 has been enacted to make provisions for the formation and regulation of limited liability partnerships and for matters connected therewith or incidental thereto. The limited liability partnership will be a separate legal entity, liable to the full extent of its assets, with the liability of the partners being limited to their agreed contribution in the limited liability partnership which may be of tangible or intangible nature or both tangible and intangible in nature.

3. It is proposed to extend the benefits of the Limited Liability Partnership Act, 2008 to the firms of chartered accountants under the Chartered Accountants Act, 1949 and to amend the provisions of that Act.

4. The Chartered Accountants (Amendment) Bill, 2010, inter alia, proposes to amend the Chartered Accountants Act, 1949 to-

(i) apply certain provisions of the Limited Liability Partnership Act, 2008 to the Chartered Accountants Act, 1949 in order to allow the members of the professional institute governed by the Chartered Accountants Act, 1949 to form the limited liability partnership and insert new definitions of "firm", "partner", "partnership" and "sole proprietorship" for the said purpose;

(ii) amend the Chartered Accountants Act, 1949 on lines similar with the provisions of the Company Secretaries Act, 1980 so as to allow the professionals of the Institute of Chartered Accounts of India to form partnership with members of such other recognised professions.

5. The Bill seeks to achieve the above objectives.

Section 1. Short title and commencement

1. Short title and commencement.-(1) This Act may be called the Chartered Accountants (Amendment) Act, 2011.

(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Section 2. Amendment of Section 2

2. Amendment of Section 2.-In the Chartered Accountants Act, 1949 (38 of 1949) (hereinafter referred to as the principal Act), in Section 2-

(i) in sub-section (1)-

(a) after clause (c), the following clause shall be inserted, namely-

‘(ca) "firm" shall have the meaning assigned to it in Section 4 of the Indian Partnership Act, 1932 (9 of 1932), and includes-

(i) the limited liability partnership as defined in clause (n) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009); or

(ii) the sole proprietorship,

registered with the Institute;’;

(b) after clause (ea), the following clauses shall be inserted, namely-

‘(eb) "partner" shall have the meaning assigned to it in Section 4 of the Indian Partnership Act, 1932 (9 of 1932) or in clause (q) of sub-section (1) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), as the case may be;

(ec) "partnership" means-

(A) a partnership as defined in Section 4 of the Indian Partnership Act, 1932 (9 of 1932); or

(B) a limited liability partnership which has no company as its partner;’;

(c) after clause (ha), the following clause shall be inserted, namely-

‘(haa) "sole proprietorship" means an individual who engages himself in the practice of accountancy or offers to perform services referred to in clauses (ii) to (iv) of sub-section (2);’;

(ii) in sub-section (2)-

(a) after the words "chartered accountants in practice", the words "or in partnership with members of such other recognised professions as may be prescribed" shall be inserted;

(b) in the Explanation, for the words "a firm of such chartered accountants", the words "a firm of such chartered accountants or firm consisting of one or more chartered accountants and members of any other professional body having prescribed qualifications" shall be substituted.

Section 3. Amendment of Section 25

3. Amendment of Section 25.-In Section 25 of the principal Act, in sub-section (1), the following Explanation shall be inserted, namely-

‘Explanation.-For the removal of doubts, it is hereby declared that the "company" shall include any limited liability partnership which has company as its partner for the purposes of this section.’.

SECTIONS