Soon CA firms can have more than 20 partners-courtesy LLP’s

The ICAI is very soon likely to release a set of business rules that will allow chartered accountants (CAs) to form limited liability partnerships (LLPs). An amalgam of partnership firm and company-LLPs were allowed to be set up in India in 2008. Once CA firms are allowed to form LLP’s, they will be in a much stronger position to compete with Global audit houses as they will be able to service a larger clientele, open branches in several cities and also partner with cost accountants, company secretaries and lawyers, and offer multiple services under one roof.
Accounting firms can currently have only 20 partners under the Partnership Act, 1932. These firms work under the principle of collective responsibility, making all partners liable for the wrongdoings of one, but in the case of LLP’s , the CA firm can not only have more than 20 partners , but ‘each partner will be responsible for his or her action solely’ .
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