You are right dear.

Dear,

To simplify it would be useful to understand the Word "Professional" First:

In General Terms A Profession is the work carried out by a Professional which requires application of mind and skills which he has aquired through special training and education.A professional does mainly mental or administratie work, as opposed to engaging in physical work.

Professional: The word professional traditionally means a person who has obtained a degree in a professional field. The term professional is used more generally to denote a white collar working person, or a person who performs commercially in a field typically reserved for hobbyists or amateurs.

Main criteria for professional include the following:

1. Academic qualifications - A teaching degree (University doctoral program), engineering, medical, or law degree - i.e., university college/institute.
2. Expert and specialized knowledge in field which one is practicing professionally.
3. Excellent manual/practical and literary skills in relation to profession.
4. High quality work in (examples): creations, products, services, presentations, consultancy, primary/other research, administrative, marketing or other work endeavours.
5. A high standard of professional ethics, behaviour and work activities while carrying out one's profession (as an employee, self-employed person, career, enterprise, business, company, or partnership/associate/colleague, etc.). The professional owes a higher duty to a client, often a privilege of confidentiality, as well as a duty not to abandon the client just because he or she may not be able to pay or remunerate the professional. Often the professional is required to put the interest of the client ahead of his own interests.
6. Reasonable work moral and motivation. Having interest and desire to do a job well as holding positive attitude towards the profession are important elements in attaining a high level of professionalism.
7. Participating for gain or livelihood in an activity or field of endeavor often engaged in by amateurs b : having a particular profession as a permanent career c : engaged in by persons receiving financial return

More here,

A profesional is not merely a CA/CS/ICWA or a Doctor. Also every Person carrying on the work of Consultancy wheather it be a

Software Consultancy,

Tax Consultancy,

Investment Consultancy,

Services regarding Capital Management,

Architect consultancies,

Civil Consultancy or

Medical Consultancy.

Thus all It Companies if providing Software Consultancy are professional, a company who provides Accounting services or tax or finance consultancy is also a professional corporate entity.

Architect Enginners providing Structural consultancies regarding structure of a building, fashion Designers providing consultancy regarding latest fashion trends (not sewing of clothes, making of jwellery or other things which may be caused threat of fashion obsoloscence) Interior designer providing services in relation to Interior design consultancy is also a professional provided these activities are restricted to provide consultancy or merely a design of structure, cloth or interior.

The Comapnies Act,1956 puts no restriction upon formation of a body corporate carrying on any profession

however certain restrictions are imposed upon certain works not to be carried out by a body Corporate

Section 11 as u mentioned, nowhere talks about a profession

thus it means a profession cannot be an Illegal Association even if it fulfills all other criterias like no of members etc.....

The Reason behind emphasising out "Profession" from the embit of Section 11 is as under:

1. generally, all the professional wants topeform their work under their individual name or under a certain firm or an AOP becuase of certain restriction imposed on the work of Body Corporate as profession like:

  a. A body Corporate is not allowed to tae comapny audits (Comapnirs Act)

  b. Certain Statements to be Certified by the individuals only

etc.

2. ICAI wants its member to perform their duties as smooth as they can

suppose for example if section 11 is extended to professinals then there will be larger no of CA firms who will be declared illegal association, as ICAi nowhere puts restriction on no of CAs in a firm or other association. (This is tha major cause of putting out "Professions" from the embit of section 11)

3. A profession is generally useful for the benefit of the public as a whole thus imposing section11 would amount to limited liability of professionals against the third partis for the intra-vires work.

However, The Comapnies Act,1956 nowhere restricted a body corporate to carry out any profession ut only certian works have been restricted to be carried out by such body corporates

In general,  the law is not enacted to always lift the corporate viel or to check every time whether a particular act amounts to lifting of coroprate viel, But in General A body Corporate is viwed as Separate Legal entity having Limited Liability unless it amounts to lifting of corporate viel in special circumstances.

Separte Legal entity or Limited Liability does never mean that ll the profession have been kept out of the object of a body corporate BUT only if when specificall mentioned in any proviosions of the Act

s
imply for conduct of stautory work section 226 speaks out clearly that a body corporate cannot be a auditor of a comapny

but this doesnt amount that all other professions as mentioned earlier hasve also been kept out from its object....

Doctors can not be found working under any company is not restricted y certain lwas but of Rules framed by Medial Council of India

however they can provide medica consultancy as a body coprpoate upon fulfiling of other norms as mention by mediacal council of India

e.g. Ranbaxy also provides medical consultancy on certian ilness and these services are provided by expert doctors.....

CA & CS can also form a body corporate to provide theior skills unless specificaly restriced (like Stat Audit, tax Audit, certifying of financial statement in a prospectus).

No such restriction that a body corpotae cannot work as a professional has been enacted either by the law or ICAI or the Central Govt.

Thus a Body Corporate can be a Professional.

If not agree Search out the "Galis of Mumbai or Gurgaon"

Very nicely written Anurag and i apreciate your work. But i am still not agree with you. If suppose i consider consultancy as profession then tax audit limit as per Section 44AB should be 15 Lacs instead of 60 Lacs.

Moreover when we talk about company then it is seprate from the person who manage its and who owns it. Lets take an example suppose Mr. X is a very famous doctor and he is giving consultancy on behalf of Ranbaxy then also we never say that Mr. X is providing professional service. Instead of this we used to say that Ranbaxy is providing consultancy service.

Now come to the defination which is provided by you for the word Profession

You clearly said that for profession one need mind and skills and as a company a seprate legal entity then how can a company have mind and skills??

Dear Thank For the Appreciation,

I liked your questions raised.... :)

Let me first clear your second Doubt

A company has its mind and skills in the form of its Directors,Managements, Employyes and Other Officers and Promoters.

As all the decisions of a company are tio be taken by them according to the powers vested in the hands of above mentioned persons.

Now come to the first questin which is very true question......

Few months back i was having the same doubt and was cleared by my principal as under:

1. A consultancy Company Generally provide two kinds of Services :

  (i). Consultancy to its clients (i.e. a Professional work)

  (ii). Any Other Business (viz, in case of Software Consultancy Companies like TCS they also provide softwares i.e. they Generate Softwares and ERPs as per the clients choice, In case of Ranbaxy they manufacture drugs, in case of A business Consultancy providing Consultants( note that providing consultants and charging fees for providing consultants is entirely different from providing Consultancy at its own, In case of Architects provding Supervisor, civil Engg or the work force etc....)

2. (i). For works carried under clause (i) of point 1the limit u/s44AB would be Rs. 15lacs

2. (ii). For works carried under clause (ii) of point 1 the limit would be Rs. 60 lacs

3. The Accounting would be done so as to to make it possible to segregate the business Income form that of the Income from the Profession and on the asme lines they wil be treated as two different activites carried out by the company for the purpose of section 44AB.

Such Segregation may or may not be shown in Financial Statemnets as they are no implicit rules under any law regarding sucgh segregation till date.

and Yes thanks for correcting me on Ranbaxy's case...its the ranbaxy which provides consultancy and the doctors..... :)....Doctors are continue to be bound by MCI

regards,

What a discussion...!

Dear Anurag,

I dont agree with the point that managers and directors have their mind, so we can assume that company also have it because if i accept it then it will make an agency relationship between the comapny and director or managers. You are talking about the powers which are given to the directors and managers but those powers are not permanent in nature. Moreover managers and directors keep on changing so can be say that mind and skills of the company keeps on changing???

As i said earlier please provide me any comapny which is doing professional work

As I have mentioned somewhere earlier in my previous posts that IT IS THE MAGIC OF "SEPARATE LEGAL ENTITY"

ALSO THE SAME PERSON CAN BE INSIDER AS WELL AS OUTSIDER.

The Question of agency does never arise.
First Consider The Companies Act,1956 has many lacunae and this is One of the Major Lacuna of this Act.

It Provides a larger Gap for Companies and their Promoters or Directors or other Officers To establish a unit very similar to Agent-Prioncipal relationship without having been lifting the Corporate Viel under the Magic of Separate Legal Entity.

It Can also not be Edited too much to reduce this Gap as it will make companies "Cut their Own Working Hands"....and will Generate Huge Corporate imbalances......

Now Lets come to your Query:

1. Obviously, A compnay being an Artifical Person doesn't have its Own Mind and skills and aslo it cannot perform any act as Humans , thus it works through its Mangement and Employees.

: It is also a type of Agency but under The Magic Of Separate Legal Entity it is presumed that all the Works are done by the Comapny itself.

Why????

The Reason being that A comapny is a egistered KLegal entity Separate from its Members in the eyes of the Law, thus Liable for its Act (even thouigh done by its members/employees/directors etc and not by at its own) to the Third Parties.
 And for this Reason the Company can sue and Can be sued in its Own Name.

After reading the Above as per the Law, Now the Members/Directors/Management have been vested unlimited powers to do any act on behalf of a Company, thus to limit their powes the lAwmakers had inserted the folowing:

1. Lifting of Corporate Viel

2. Ultra Vires Act and Liabilities for such Acts

1. lifting Of Corporate Viel :
The Company can perform Any act authorised by its MOA & AOA and continue to be viwed upon as Separate Legal entity.

The Only Exception is for the Acts where the notion of Separate Legal entity is used to defeat Public, Justify Wrong, Protect Fraud r defend Crime.

2. The Ultra Vires Act has already been discussed eralier.

Now, You sould yourself assume that if we consider that the management is not the Brain and Heads of the comapny

Then who is doing the following Activities: ?

Any of the act even being a manufacturing activity, R&d Activities , Treading 7 usiness, Dealing with creditors, customers, negotiations, Banking Habits etc....All these activites nead use of Mind and skills but to a much smaller extent as compared to a professional work.

If The mind & skills of mangemnet of a comapny when  used by a comany be assumed to be cause of forming agent-principal relationship

then all the General day to day activites will start falling under such agency and it will amoun to lifting of corporate viel even though there is no defeat to public nor even the company is trying to protect any fraud/justify wrong.....

Thus, it will create huge imbalances and corporate Culture

to prevent this,

it is assumed that the mangement & other decision makin Authorities of a Company are its Mind & Brain and their skilss can be used by a comapny at any time for performing acts authoties by its ARticles. For using such Mind & Skills The company somtimes also issue Sweat to those officers/emlopyees whose Skills have been utilised by the comapny.

All these things make a Comapny able to carry out professional work..............

Now in earlier days where the Comapnies have started carrying out Professional work there were arising many difficulties to the public convinience and many of the case laws of lifting of Corporate viel have strated prevailing Indian Corporate Society.

As a professional is assumed of having leading role for the development of several facets of a society, they are liable to the public

For preventing such practices the lawmakers are inserting and have inserted many Leghal boundation for carrying certain specifc Professonal work(by a company) for the general benefit of the public as a whole.

But still there are numerous Acts which can be performed by a caompany as professional using the Mind & skilss of its Mangmenet through its employees :Again it will be the Magic of corporate viel that there will be no Agency and the company at its own will be liable fior the Third Party subject to the cluase of Intravires acts authorised by its MOA & AOA