Allows partnerships with CA CS CMA Professionals: ICAI

• The ICAI Notification dated 08.07.2021, published in the Official Gazette, marked a significant reform by allowing chartered accountant firms to function as Multidisciplinary Partnership (MDP) firms.
• This framework enables CA firms to expand beyond traditional accounting and auditing services by partnering with professionals from other recognized disciplines.
• In simple terms, the 2021 notification transformed the regulatory landscape by enabling CA firms to evolve from traditional accounting practices into full-service professional advisory organizations, similar to leading international consulting and professional service firms.

ICAI’s Multidisciplinary Partnership (MDP) Framework for CA Firms

• Following amendments in Form 18 and the provisions of Section 53B of the Chartered Accountants Act, 1949, a CA firm can now enter into a partnership with various professionals, including Cost Accountants (CMAs), Company Secretaries (CSs), Advocates, Engineers, Architects, MBAs and Management Professionals, Actuaries, Valuers, and Other professions approved by the ICAI Council.
• The objective of this reform is to create integrated professional service firms capable of providing multiple services under one roof, such as audit, taxation, legal advisory, secretarial compliance, valuation, risk management, engineering consultancy, business advisory, and management consulting.
• This move aligns with the government’s broader vision of developing large Indian multidisciplinary professional firms that can compete with global consulting and audit networks. By bringing together experts from different fields, MDPs can offer comprehensive solutions to clients, improve service quality, enhance professional capabilities, and create globally competitive Indian firms.

Key Highlights of ICAI’s Revised Form 18 and Multidisciplinary Partnership (MDP) Framework

• Under the Chartered Accountants Regulations, 1988, the ICAI maintains a register of chartered accountant firms and practicing CAs. Every CA firm is required to file Form 18 with ICAI for registration of office details, firm constitution, address, and any subsequent changes.
• A practicing CA or CA firm must submit Form 18 within one month of approval of the firm name, commencement of practice, or any change in the firm’s constitution or office particulars.
• Through Notification No. 1-CA(7)/197/2021 dated 08 July 2021, ICAI introduced a revised Form 18, which came into force from the same date.
• The amendment paved the way for Multidisciplinary Partnership (MDP) firms, enabling chartered accountants to collaborate with other professionals such as cost accountants (CMAs), company secretaries (CSs), advocates, engineers, architects, MBAs, and other professionals notified under Section 53B of the Chartered Accountants Act, 1949.
• This landmark reform allows Indian professional firms to provide integrated services under one roof, including audit, accounting, taxation, legal advisory, secretarial compliance, valuation, engineering consultancy, management consulting, and other professional services, thereby enhancing their competitiveness and supporting the creation of globally recognized Indian professional service firms

Key ICAI References on Multidisciplinary Partnership (MDP) Firms

To facilitate the formation and operation of Multidisciplinary Partnership (MDP) firms, ICAI has issued a comprehensive regulatory framework through the following key documents:

1. The Chartered Accountants (Amendment) Regulations, 2021 (dated 08.07.2021)
   Introduced amendments to the Chartered Accountants Regulations, including the revised Form 18, enabling chartered accountants in practice to form partnerships with other specified professionals.
2. Guidelines for Formation of Multidisciplinary Partnership Firms
   These guidelines lay down the eligibility criteria, permissible professions, ownership structure, management requirements, and regulatory compliance framework for MDPs under the Chartered Accountants Act, 1949.
3. FAQs on Multidisciplinary Partnership Firms of Chartered Accountants in Practice
   ICAI has also issued detailed FAQs to clarify practical aspects relating to the formation, registration, management, ownership, networking arrangements, and professional responsibilities of MDP firms.

Collectively, these documents establish the legal and operational framework for CA firms to partner with professionals such as CMAs, company secretaries, advocates, engineers, architects, MBAs, valuers, and other approved professionals, thereby promoting integrated professional service firms capable of providing audit, taxation, legal, advisory, compliance, valuation, and consulting services under a single platform.

This initiative is a significant step toward building globally competitive Indian professional services firms.

• India is taking steps to create large homegrown multidisciplinary professional firms that can compete with global consulting and audit giants.
• To support this vision, the Institute of Chartered Accountants of India  is preparing a report focused on enabling Indian firms to access funding for infrastructure, technology, office expansion, and global growth.
• Initiative aligns with India’s ambition of becoming a developed economy by 2047 and aims to build strong indigenous professional services firms offering a wide range of services under one umbrella, including auditing, accounting, taxation, legal advisory, valuation, secretarial services, assurance, and management consulting. The government and ICAI are actively discussing policy measures to support this ecosystem.
• The ICAI president has emphasized that the development of large Indian multidisciplinary professiona requires support in areas such as regulatory reforms, technology adoption, financing, capacity building, and a change in mindset.
• To further this objective, the MCA has also constituted an Inter-Ministerial Group to examine ways to strengthen India’s domestic consulting and auditing sector.

Reason of Global-Scale Indian Professional Services Firms

• Although India has a vast pool of highly qualified professionals, domestic firms currently have a limited presence in high-value audit and consulting assignments due to structural and regulatory challenges.
• By facilitating access to finance and creating a supportive ecosystem, the government and ICAI aim to develop globally competitive Indian professional service firms capable of expanding internationally and capturing a larger share of the USD 240 billion global consulting and auditing market.

Conclusion:

• The MCA has set up an Inter-Ministerial Group (IMG) to strengthen India’s consulting and auditing sector and build globally competitive Indian professional services firms.
• The initiative aims to promote Atmanirbhar Bharat, reduce dependence on multinational firms, and support Indian firms in areas such as audit, advisory, compliance, ESG, and consulting services.
• By addressing regulatory and structural challenges, the government seeks to help Indian firms expand internationally and capture a larger share of the USD 240 billion global consulting and auditing market.