engages in any business or occupation other than the profession of chartered accountants unless permitted by
the Council so to engage:
Provided that nothing contained herein shall disentitle a chartered accountant from being a director of a
Company, (not being a managing director or a whole time director), unless he or any of his partners is interested in
such company as an auditor; This is a provision introduced to restrain a member in practice from engaging himself in any business or occupation other than that of Chartered Accountant except when permitted by the Council to be so engaged. The objective is to restrain members from carrying on any other business in conjunction with the profession of accountancy and
combining such work with any business which is not in keeping with the dignity of the profession. Another reason for the introduction of such prohibition is that a Chartered Accountant, if permitted to enter into all kinds of business, would be able to advertise for his other business and thereby secure an unfair advantage in his professional practice.
The Council, on a very careful consideration of the matter, has formulated Regulations 190A & 191 which are reproduced below,
specifying the activities with which a member in practice can associate himself with or without the permission of the Council.
190A. Chartered Accountant in practice not to engage in any other business or occupation
A Chartered Accountant in practice shall not engage in any business or occupation other than the profession of accountancy,
except with the permission granted in accordance with a resolution of the Council. Please refer to Appendix (9) of the Chartered Accountants Regulations, 1988, (see Appendix-‘F’).
191. Part-time employments a Chartered Accountant in practice may accept
Notwithstanding anything contained in Regulation 190A but subject to the control of the Council, a Chartered Accountant in practice may act as a liquidator, trustee, executor, administrator, arbitrator, receiver, adviser or representative for costing, financial or taxation matter, or may take up an appointment that may be made by the Central Government or a State Government or a court of law or any other legal authority or may act as a Secretary in his professional capacity, provided his employment is not on a salary-cum-full-time basis.
The Council has considered the question of permitting members in practice to become a Director, Managing Director, full time/Executive Director etc. and related issues and the following decisions have been taken:-
As regards the question of permitting a member in practice to be a Director, Promoter/Promoter- Director, Subscriber to the Memorandum and Articles of Association of any Company, it was decided that:
(a) Director of a Company
(i) The expression “Director Simplicitor” means an ordinary/simple Director.
(ii) A member in practice is permitted generally to be a Director Simplicitor in any Company including a board-managed
Company and as such he is not required to obtain any specific permission of the Council in this behalf unless he or
any of his partners is interested in such Company as an auditor, irrespective of whether he and/or his relatives hold
substantial interest in that Company.
(b) Promoter/Promoter-Director There is no bar for a member to be a promotor/signatory to the Memorandum and Articles of Association of any Company. There is also no bar for such a promoter/signatory to be a Director Simplicitor of that Company irrespective of whether the objects of the Company include areas which fall within the scope of the profession of Chartered
Accountants. Therefore members are not required to obtain specific permission of the Council in such cases. It must be clarified that under Section 25 of the Chartered Accountants Act, no Company can practise as a Chartered Accountant.
Item Nos. 4 of the Specific Resolution would be equally applicable to member carrying out the activities referred to therein in his capacity as Karta/representative of HUF provided he is not actively engaged in carrying on such activities.