Manual Relating to Members

17. Change in Constitution of Firm

(Regulation 190)

(1) The details regarding change in particulars of the firm in Form 18 are required to be submitted to the
Institute's office within 30 days from the date of such change.

(2) Requirements

(a) A letter informing changes in the firm alongwith Form 18 duly signed by all the partners with change
in particulars is required to be submitted within one month from the date of change in the
constitution.

(b) In case of leaving of a partner a letter of consent of retirement signed by the retiring partner and Form
18 signed by the existing partner/s of the firm is required to be submitted. The firm should confirm
the retirement of the partner.

(c) In case of opening/closing of a firm, a letter informing the exact date of opening/closure must be
submitted.

(d) In case of a closure/dissolution of the firm a letter signed by all the partners confirming the
closure/dissolution must be submitted.

(e) In case of sole proprietary firms, closure/sole practising member's closure, an intimation by the
member giving the exact date of closure must reach the Institutes office within one month.

Condonation of Breach of Regulation 190(7)*

(1) In case there is delay in submitting Form 18 beyond one month, the firm shall submit an application
for condonation of delay stating reasons alongwith copy of Partnership Deed/Profit & Loss A/C,
Balance Sheet and copy of Income Tax Returns certified by a practising chartered accountant, a
"Declaration" in the prescribed Format (please see page 88) and condonation fees as applicable.

(2) The Decentralised Office will issue a letter confirming the change in constitution to the Firm after
condonation of delay by the competent authority.

Sale/Transfer of Goodwill of A Firm

Transfer of goodwill of the firms of Chartered Accountants are permitted by the Institute subject to
fulfillment of the following procedure :-

1. An application in writing should be forwarded by a member, holding Certificate of Practice,

intimating his intention to purchase goodwill.

2. The application should be made within one year from the date of death of the member.
 Manual Relating to Members

3. The application should be sent alongwith the following details:

a) Death Certificate of the deceased member; and
b) (i) A draft sale deed for sale/transfer of goodwill entered into between the legal heir/s of the
deceased and the members intending to purchase goodwill.
(ii) The sale of goodwill deed must be very clear as to the amount of consideration and payment
thereof in one or more installment(s) to be paid within a specified period. The consideration should
not be contingent upon future profit.
4. Documents, such as, succession certificate or Will, legal heir certificate or an affidavit sworn by all
legal heir/s stating that there is/are no other legal heir/s to the deceased member.
5. Legal heir, in this context, means spouse, child/children and parents.
6. If the agreement is entered into by one of the legal heirs, 'No Objection' from the other legal heirs,
except those minor, are also required to be submitted. In case of minor, 'No Objection' is to be
obtained from the guardian.
7. The member intending to purchase the goodwill should give an advertisement about intention to
purchase such goodwill, and the advertisement should spell out that anyone having objection
thereto should send the objection directly to the respective Decentralised Office (address of which
shall be indicated in the advertisement). The intending purchaser should send a copy of the
advertisement so published to the concerned Decentralised Office.
8. Within 30 days of the receipt of the approval for transfer of goodwill, the member purchasing the
goodwill should file Form 18.
* Please see chapter No. 20 on Condonation of breach of Regulations for non-filing of Forms within specified time

Submission of Particulars of Offices and Firms in Form no. 18 - Regarding

It has been decided that in respect of the following changes in the firm, the particulars thereof in form no.
18 need not be called for from the firm :-
i) Joining or Leaving of Paid Assistant
ii) Opening or Closing of Branch Office(s)
iii) Change in Incharge or the HO or Branch Offices(s)
iv) Closure of Firms (to be signed by all the partners)
v) Change in address of HO or Branch Office(s)
A written intimation signed by the member incharge firm or the authorized partner of the firm will suffice
compliance of the requirement of the Regulation 190(7) provided the same is received within one month
from the date such change have taken place. However, if the information is not received within one month
from the date of such change, this will be treated as breach of Regulation 190(7) and levy fee for
condonation of delay is required to be collected from the firm.