Representatives of the professional bodies for chartered accountants (CAs), company secretaries and cost accountants will meet later this month to decide on ways members of the three institutes can work together in a limited liability partnership (LLP) firm.

The presidents of the Institute of Chartered Accountants of India (Icai), the Institute of Company Secretaries of India (Icsi) and the Institute of Cost and Works Accountants of India (Icwai) independently confirmed that the coordination committee of the three bodies will meet to decide on the modalities of framing multidisciplinary partnerships (MDPs) under the relatively new LLP structure.

An LLP is a business that combines the benefits of a limited liability company with the flexibility of a partnership firm. Although LLPs were allowed in 2008 through a law, accountants and company secretaries could not form MDPs because of regulatory hurdles.

Parliament in December, however, passed amendments to the three laws governing these institutes, allowing them to form MDPs. The amendments will permit as many as 100 CAs, cost accountants and company secretaries to work together as partners in the same company, allowing them to provide cost-effective services, operate branches in multiple locations, and create a brand for themselves.

The institute has already prepared an enabling framework for MDPs, and once a decision is taken in the coordination committee on how best we can work together under one roof, we look forward to several company secretary partnership firms to convert to MDP LLPs, said Nesar Ahmed, president of Icsi.

This will help these professionals work together and be responsible to their own institutions, Ahmed said.

Professional firms can currently have as many as 20 partners under the Partnership Act of 1932. These firms work under the principle of collective responsibility, making all partners liable for the wrongdoings of one. But under an LLP, each one will have a limited liability and, thus, responsible only for his or her own wrongdoings.

Icai president G. Ramaswamy said the body has already developed guidelines on how CAs will work under MDPs, whether they will call the MDP an audit firm if it has a larger number of CAs, how much will CAs spend on things such as brand development, what happens when a partner increases his stake, among other things.

All these will be discussed at the meeting of the core committee, which we expect to be held as soon as the new president of Icai and a council are elected, said Ramaswamy.

Icai will elect a new president next week. The central council is a core group of Icai members, which takes decisions and represents the institute in meetings with the government and other organizations.

Sunil Talati, a former president of Icai, said that while he is excited about converting his firm into a MDP under the LLP structure, there are issues that have to be sorted out.

For instance, if I register Talati and Talati CAs LLP, my company secretary and cost accountant partners will not be happy as this will appear more like a CA-dominant firm. So will the company be allowed to change its name when partnership pattern changes? said Talati.

These are things that MCA (ministry of corporate affairs) has to clarify and the respective institutes have to agree with, so that no confusion occurs once MDPs are formed, said Talati.

M. Gopalakrishnan, president of Icwai, said it will take four-five months for MDP LLPs to start rolling out as MCA will take some time to notify the business rules for such entities.

However, there is no doubt this will give smaller accountants and company secretaries a chance to grow and serve their clients in a seamless manner, said Gopalakrishnan.

More than 7,500 LLPs have registered since India allowed the structure. An MCA official, requesting anonymity, said the ministry is working on developing guidelines for MDPs so that such business structures can start operations next fiscal.