ICAI notifies Aggregation of LLPs Guidelines 2024 [Read Notification]

The Institute of Chartered Accountants of India (ICAI) has notified Aggregation of LLPs Guidelines 2024 via issuing a Notification.

The Notification Read as Follows:

In exercise of the powers conferred by Section 15(2) (fa) of the Chartered Accountants Act, 1949, as amended from time to time, the Council of the Institute of Chartered Accountants of India hereby makes the following Guidelines.

These guidelines are called ICAI (Aggregation of LLPs) Guidelines 2024. It will be effective from the date of its notification in the gazette of India.

Definitions

In these guidelines, unless the context otherwise requires, the following expression shall have the meaning assigned to it in the respective definition:

a. Institute/ICAI: ‘Institute’/ ‘ICAI’ means the Institute of Chartered Accountants of India established under section 3 of the Chartered Accountants Act, 1949.

b. Council: ‘Council’ means the Council of the Institute constituted in accordance with Section 9 of the Chartered Accountants Act, 1949.

c. Act: ‘ Act’ means the Chartered Accountants Act, 1949 (No.38 of 1949) as amended from time to time.

d. Limited Liability Partnership/LLP: ‘Limited Liability Partnership’/’LLP’ shall have the meaning assigned to it in section 2(ca) of the Act and registered with ICAI.

e. Parent LLP: Parent LLP means LLP consisting of more than 50% of Chartered Accountants as its partners which is admitting another LLP as its partner.

f. Partner LLP: Partner LLP means LLP consisting of more than 50% of Chartered Accountants as its partners which is joining another LLP as a partner.

Eligibility

1. Any full-time practicing Chartered Accountant/(s) (CA) or Limited Liability Partnership (LLP) where more than 50% of partners are practicing Chartered Accountants registered with ICAI may form a new LLP or join an existing LLP as a partner provided that the individual full time practicing Chartered Accountants should not be less than two at any given time in compliance with Section 7 of the LLP Act,2008. The same is applicable to both parent/partner LLP.

2. The majority or more than 50% criteria for the purpose of computing eligibility shall be calculated both on the basis of the number of partners as well as their aggregate share of profits in the LLP so that the majority criteria is established both for parent and partner LLPs.

3. The number of individual partners, shall at all times, be in majority, i.e., more than 50% both in numbers of partners as well as their aggregate share of profits vis-à-vis the LLP partners.

4. The partner LLP can become partner of only one parent LLP under these guidelines. Similarly, parent LLP cannot become partner of any other LLP.

Governing Provisions

The constitution of LLP will be governed by the applicable provisions of ‘Chartered Accountants Act 1949’, ‘LLP Act 2008’, ‘Council guidelines for conversion of CA Firms into LLPs 2011’ as amended from time to time, MCA circulars issued on the subject among others as amended from time to time.

Naming Clause

1. When four Indian LLPs, viz. A & Co. LLP, B & Co. LLP, C & Co. LLP and D & Co. LLP, where more than 50% of partners are practicing Chartered Accountants (CAs) and are registered with the Institute as per the stated criteria may come together to form a LLP or join existing LLP as partners as per the applicable provisions of ‘Chartered Accountants Act 1949’, ‘LLP Act 2008’, ‘Council guidelines for conversion of CA Firms into LLPs 2011’, MCA circulars issued on the subject among others as amended from time to time.

2. In case a new LLP is being formed for availing the benefits under these Guidelines, the name approval process shall be in line with the Regulation 190 of the Chartered Accountants regulations 1988, Council guidelines for conversion of CA Firms into LLPs 2011, MCA circulars issued on the subject from time- to-time, applicable provisions of the LLP Act 2008 and the practice followed by the ROC from time to time.

Registration

The LLPs should have to register under these guidelines with the Institute and the details of all the partner LLPs will be given effect in the records to reflect the combined strength, geographical presence among others and a firm registration number be given as per the procedure followed in case of any other Chartered Accountant LLP.

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