Accounting regulator Institute of Chartered Accountants of India (ICAI) is contemplating prohibiting chartered accountant firms from using identical names, a decision which may have implications for accountancy firms like PwC and Deloitte.
ICAI is considering a proposal to not allow registered firms to have identical names. Its standing committee has passed the proposal. It is now for the executive council (of the ICAI) to pass it and forward the proposal to the government for necessary action.
If the proposal is accepted by the government, Firms will be prohibited from having names like ABC-Delhi and ABC-Chandigarh.
Commenting on the proposal, a senior executive of a foreign accountancy firm said, “With the Limited Liability Partnership Act in place, companies would not need to operate with different names.”
Many large accountancy firms, the executive added, were forced to adopt identical names with some suffix because of the limitation of partners under the Partnership Act.
As per the Partnership Act, a firm cannot have more than 20 partners. These firms can transform themselves into LLPs and can have any number of partners.
At present, many CA firms, including some well-known names like PWC and Deloitte operate through different firms having almost identical names.