Demerger of CA firm
This query is : Resolved
01 May 2024
if a proprietor ship firm merged in partnership firm and that proprietorship firm want to demerge later, is all the current partners of the newly merged firm consent and otp validation is required to demerge or only proprietorship consent or otp validation is required after giving notice by the proprietorship to icai and other partners.
02 May 2024
All the partners consent and OTP validation required.
02 May 2024
THEN WHATS THE PURPOSE OT THIS CLAUSE IN DEMERGER...The merger has to precede the demerger. The merger agreement itself shall contain the terms and conditions for demerger. Therefore no concurrence@acceptance is reuired from the continuing partners. Themerger agreement shall stipulate that in case ;5C or more of thecontinuing partners of one of the erstwhile $rm(s) are willing to demergethen the% can do so after giving due notice in
Form #F%
(enclosed) to theother partners and to the Institute
Form #F%
(enclosed) to theother partners and to the Institute
02 May 2024
THEN WHATS THE PURPOSE OT THIS CLAUSE IN DEMERGER...The merger has to precede the demerger. The merger agreement itself shall contain the terms and conditions for demerger. Therefore no concurrence@acceptance is reuired from the continuing partners. Themerger agreement shall stipulate that in case ;5C or more of thecontinuing partners of one of the erstwhile $rm(s) are willing to demergethen the% can do so after giving due notice in
Form #F%
(enclosed) to theother partners and to the Institute
Form #F%
(enclosed) to theother partners and to the Institute
02 May 2024
IF THE PARTNERSHIP FIRM NOT READY TO DMERGE THEN A PROPRIETORSHIP NOT ABLE TO DEMERGE THEN WHATS THE REMEDY
02 May 2024
In such a case no consent is required as per demerger agreement.
02 May 2024
THESE ARE THE CLAUSES IN MERGER AGGREMENT
1.That the name of the erstwhile merging firms will be frozen by the Institute.
2.And in case 75% or more of the continuing partners of one or more erstwhile merging firm(s) are willing to demerge, they can demerge
after giving due notice and will be entitled to the following benefits :
(i)
They will be entitled to the total seniority acquired i.e. their earlier pre-merger seniority and the years during which they were in
merged firm.
(ii) They are entitled to their old firm’s name.
Provided in case, 75% is a fraction, then the same will be rounded off to the next number.
3. That the date of establishment of the new demerged firm will be the date of demerger.
4. That the demerged firm is entitled to seniority of pre-merger and merger period for the empanelment and other professional purpose.
5.
That to effectuate such demerger, no concurrence/acceptance is required from the other continuing partners of the merged firm. The
partners of such demerged firm shall execute a partnership deed. The merged firm as well as the demerged firm shall submit fresh Form
18 as prescribed under the Chartered Accountants Regulations, 1988 to the Institute within the prescribed period.
6.
In case of 75% or more of the continuing partners of one of the erstwhile merging firm have demerged after giving due notice to the other
partners, then in such case, the merger shall come to an end and if the remaining erstwhile merging firms/partners of the erstwhile
merged firm decided to continue, then they should enter into a fresh Merger/Partnership Agreement and shall submit fresh Form 18 as
prescribed under the Chartered Accountants Regulations, 1988 to the Institute within the prescribed
CAN U EXPLAIN STILL OTP VALIDATION IS REQUIRED FROM THE OTHER PARTNERS?
1.That the name of the erstwhile merging firms will be frozen by the Institute.
2.And in case 75% or more of the continuing partners of one or more erstwhile merging firm(s) are willing to demerge, they can demerge
after giving due notice and will be entitled to the following benefits :
(i)
They will be entitled to the total seniority acquired i.e. their earlier pre-merger seniority and the years during which they were in
merged firm.
(ii) They are entitled to their old firm’s name.
Provided in case, 75% is a fraction, then the same will be rounded off to the next number.
3. That the date of establishment of the new demerged firm will be the date of demerger.
4. That the demerged firm is entitled to seniority of pre-merger and merger period for the empanelment and other professional purpose.
5.
That to effectuate such demerger, no concurrence/acceptance is required from the other continuing partners of the merged firm. The
partners of such demerged firm shall execute a partnership deed. The merged firm as well as the demerged firm shall submit fresh Form
18 as prescribed under the Chartered Accountants Regulations, 1988 to the Institute within the prescribed period.
6.
In case of 75% or more of the continuing partners of one of the erstwhile merging firm have demerged after giving due notice to the other
partners, then in such case, the merger shall come to an end and if the remaining erstwhile merging firms/partners of the erstwhile
merged firm decided to continue, then they should enter into a fresh Merger/Partnership Agreement and shall submit fresh Form 18 as
prescribed under the Chartered Accountants Regulations, 1988 to the Institute within the prescribed
CAN U EXPLAIN STILL OTP VALIDATION IS REQUIRED FROM THE OTHER PARTNERS?
02 May 2024
As per clause 5 OTP validation is not required from the other partners.
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