THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

(Chartered Accountants)

NOTIFICATION

New Delhi, 23rd January, 2025

No. 1-CACAF/LLP-F/2025- 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, namely:-

1. Short title and commencement

(1) These guidelines are called ICAI (Aggregation of LLPs) Guidelines 2024.

(2) It will be effective from the date of its  notification in the gazette of India.

2. 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.

3. 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.

4. Governing Provisions

1. 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.

5. 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.

6. Registration

1. 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.

7. Practice

1. The Board of Management shall be constituted by the parent LLP and it should comprise of the authorized Managing Partners from the partner LLPs and the parent LLP’s decision shall prevail over other partner LLPs for all assurance, non-assurance  audit works and for other assignments.

2. The Board of Management shall draw its powers and authority in accordance with terms outlined in the written deed agreed upon by all the partners that shall be subject to and in compliance with the provisions of the Chartered Accountants Act 1949, LLP Act 2008, ICAI’s Code of Ethics and Council Guidelines among others from time to time.

3. The Board of Management shall be constituted under these guidelines, comprising of the authorized Managing Partners from the partner LLPs, that shall ensure –

(a) regulatory and legal compliances,

(b) manage affairs of the firm,

(c) undertake strategic decisions including but not limited to business strategy, financial management, profit appropriation, cost sharing, hiring of personnel, risk management, infrastructure expansion, etc.,

(d) entire process of registration at the SSP portal of ICAI through online mode,

(e) all the documents pertaining to the firm/(s)/practice like partnership deed, papers relating to resignation or joining of partners, employment and relieving of qualified assistants, papers and details regarding the approvals given for any constitution or re-constitution of the firm, etc. from time to time which may be called upon by the ICAI in case they are required for any dispute or any enquiry or confirmation required by the ICAI,

(f) clearly state to the incumbent partner LLPs about the restrictions of audit or non-audit works likely to arise from Section 144 of the Companies Act 2013 or any issue in code of conduct or ethics or in any Governing law applicable to the LLP firm at the time of joining itself,

(g) establish dispute resolution mechanism to review the matters among parent LLP, partner LLPs and individuals in LLP/(s) and endeavour to reach a mutually acceptable resolution within a reasonable timeframe, if the disputes remain unresolved, it shall proceed to mediation or shall be referred to arbitration in accordance with the Arbitration and Conciliation Act, 1996,

(h) decide upon the participation of the parent LLP or partner LLPs in empanelment or tendering processes,

(i) clearly lay down the reconstitution mechanism encompassing the joining or suspension of partners of parent LLP, partner LLP and individual partners of LLP/(s),

(j) decide upon the matters relating to goodwill, settlement of accounts and clients in case of reconstitution or dissolution among others, and

(k) Or any other matter agreed amongst them.

4. Rotation of audit and joint audit amongst partner LLPs will not be permitted.

5. The LLPs associated as partners of the LLP (i.e. partner LLPs) are bound by written deed and may also practice as independent LLP firm simultaneously, subject to terms of written deed.

8. Characteristics

1. Partner LLPs come together under these guidelines for mutual benefits by pooling resources, showcase their combined strength, and have uniform policies, technology and collaterals, and showcase themselves as one big unit as per the terms outlined in the written deed.

2. Written byelaws / agreement is entered by all firms & their partners, the provisions of which should not run contrary to CA Act, CA Regulations, ICAI Code of Ethics and Council Guidelines.

3. Quality control should be well documented and complied with, which is applicable to the parent LLPs and its partner LLPs.

4. Since all LLPs either parent or partner are LLPs registered with ICAI, referral of work and sharing of fees/ profits amongst them is permitted as per the applicable provisions of Chartered Accountants Act 1949.

9. Reconstitution

1. Reconstitution must be registered with ICAI and with others regulatory bodies following the due procedure as per the applicable laws from time to time.

2. However, any change in the partners of a LLP shall not affect the existence, rights, or liabilities of the limited liability partnership, as per the Section 3(3) of the Limited Liability Partnership (LLP) Act, 2008.

3. Reconstitution will not deprive the remaining partner LLPs of the parent LLP from continuing the work they have already secured by virtue of parent LLP.

4. The reconstitution in any of partner LLP must ensure that the partners in the reconstituted LLP are also bound by the agreement entered by it with parent LLP.

10. Exit/Closure

1. The laid down process for exit as a partner LLP from a parent LLP or the closure of the LLP as per the applicable rules of ICAI, LLP Act 2008, procedures followed by the ROC/Registrar of firms among others shall be followed.

11. Miscellaneous

1. Document repository in line with the ‘Digi Locker’ is proposed to be provided, named as “Doc Locker”, to LLPs opting for these guidelines to place their documents in a secured vault and can access, use and submit the documents hassle free, duly integrated with the SSP. This “Digi Locker” can be used for other purposes also. The said arrangement will encourage the LLPs to take the leverage of tech-infrastructure provided by ICAI while collaborating and networking.

2. A Grievance Redressal Cell under the aegis of M&SS Directorate will cater to the queries on the emerging issues under these guidelines.

3. As per the provisions of the LLP Act 2008, a body corporate constituted within, or outside India is eligible to be a partner in the LLP. However, under these Guidelines, a body corporate which has been incorporated as a Company under Companies Act 2013 in India or under applicable laws outside India has not been permitted from being eligible to be a partner to parent LLP, in alignment with the provisions of Section 25 of the Chartered Accountants Act 1949.

Dr. JAI KUMAR BATRA Secy.

[ADVT.-III/4/Exty./921/2024-25]

Summary Note

The ICAI (Aggregation of LLPs) Guidelines, 2024 have introduced a transformative framework enabling multiple ICAI-registered CA LLPs to come together under a Parent LLP–Partner LLP model while retaining their independent legal identities. This initiative is aimed at strengthening the professional capabilities of Chartered Accountant firms through resource sharing, wider geographical presence, combined expertise, enhanced infrastructure, and improved competitiveness for large audit and consultancy assignments.

Under the aggregation model, participating LLPs can pool their manpower, technology, specialization, industry experience, and professional resources to function as a larger professional network. The combined strength can significantly improve eligibility for Government audits, PSU audits, Bank audits, C&AG empanelments, tenders, and high-value assignments that often require substantial partner strength and geographical coverage.

A major advantage is that partner LLPs continue to retain their independent existence while simultaneously benefiting from a common platform for growth. The guidelines also permit referral of work and sharing of fees/profits among participating LLPs, subject to the Chartered Accountants Act and ICAI regulations.

The framework encourages the creation of larger and professionally managed CA practices capable of competing with national and international accounting networks. It also promotes quality control, technology adoption, structured governance, dispute resolution mechanisms, and collaborative growth across the profession.

Key Benefits to CA Firms

1. Increased eligibility for large Government and PSU assignments.
2. Enhanced prospects in C&AG empanelment and audit allotments.
3. Combined partner strength and professional resources.
4. Wider geographical presence across multiple states and cities.
5. Pooling of industry expertise and sector specialization.
6. Improved capacity to handle large-scale audits and consulting engagements.
7. Better utilization of technology and infrastructure.
8. Legal framework for referral and fee-sharing arrangements.
9. Stronger brand visibility and market positioning.
10. Retention of independent LLP identity while enjoying collective advantages.
11. Improved succession planning and business continuity.
12. Greater competitiveness against large accounting networks and multinational firms.
    
    Source Code:
    https://www.icai.org/post/icai-aggregation-of-llps-guidelines-2024 
    
    

    
    C&AG Policy for the year 2026-27 & onwards
    Additional  Annexure I

    Additional Clauses relating to empanelment/allotment of audit to Networking/Multi Disciplinary Partnership Firms/Aggregation of LLPs

    The following clauses will be effective from the date to be announced by the Office of the Comptroller & Auditor General of India:

    A.     If both the partner and parent LLP are applying, then they will be treated as individual Firms/LLP, and clauses of the policy mutatis mutandis will apply.

    B.      In case only Parent LLP is applying, the following will apply:

     

    Sr. No.	Parameter	Procedure
    Quantitative Parameters
    1	Full time Partners	The first 10 full time CA partners of the parent LLP will get full points while the remaining 10 partners (excluding any partner LLP) will get half of these points However, in case of CA partners of Partner LLP, 1/4th of the allowable points would be given.
    2	Full Time CA Employees	The first 10 full time CA employees of the Parent LLP will get 1 point and remaining 10 full time employees (excluding employees of Partner LLP) will get half of these points. However, in case of Full time CA employees of Partner LLP 1/4th of the allowable points would be given.
    3	Experience of Firm/LLP	1 point for every calendar year shall be given in respect of the experience of Parent LLP and 0.25 point for every calendar year shall be given in respect of the experience of Partner LLP.
    4	Turnover of the firm/LLP	25 percent of turnover of Partner LLP would also be taken into consideration.
    Qualitative Parameters
    5	Peer Review	A valid Peer Review certificate of Parent LLP firm only will be considered.
    6	Audit Experience	The experience (excluding that of partner LLP) will be calculated as mentioned above. Further the experience of Partner LLP would be given 1/4th of the allowable points.
    Professional Track Record
    7	Penalty by Regulators	Reprimanded/Advisory issued by ICAI/QRB/NFRA If a Parent LLP has been reprimanded/advisory issued by ICAI/QRB/NFRA or any other Regulator, the point score of the Parent LLP will be reduced by 10%. If the Partner LLP has been issued/imposed an advisory, the point score of the Parent LLP, would be reduced by 2.5 percent. Professional Misconduct by a member as per ICAI The point score of the Parent LLP will be reduced by 10 percent each in case CA partner/s of the Parent LLP is/are held guilty of professional misconduct and will be reduced by 2.5 percent each for CA partner/s of the

    
    

    		Partner LLP who is/are held guilty of professional misconduct during the previous year under the Chartered Accountants Act, 1949 Apart from deduction of points the Firm/LLP would not be given any credit for the said Partners.
    8	Debarment                                  by Regulators/Government Authorities	In case Parent LLP is debarred, parent and partner LLPs will not be empaneled for the period of such debarment. In case of debarment of partner LLP the additional points of CA partners of such debarred partner LLP would not be given to parent LLP. In case, Parent LLP/Partner LLP is removed by the NCLT under section 140(5) of the Companies Act, 2013, such firms will not be empanelled for the period of such removal.
    9	Conviction under the Companies Act, 2013	Where a partner in Parent LLP stands convicted under the provisions of the Companies Act, 2013, such CA Firm/LLP shall not be eligible for empanelment. In case of Conviction of CA partner of a Partner LLP, no additional marks or points attributable to convicted partners of Partner LLPs shall be reckoned for the Parent LLP.
    10	Criminal Cases	Criminal proceedings initiated by CBI/ED/SFIO a.       Registration of FIR against the Parent LLP or its partners shall permit empanelment, but no audit shall be allotted during pendency of the FIR. b.       Where a partner in Parent LLP stands convicted by a Court of Law in a criminal case under the provisions of Prevention of Money Laundering Act, 2002 or any other Securities Law, filed by any of the aforesaid agencies, such CA firm/LLP shall not be eligible for empanelment. c.       In case of Conviction, charge-sheet or FIR against any CA partner of a Partner LLP, no additional marks or points attributable to convicted or charge-sheeted partners of Partner LLPs shall be reckoned for the Parent LLP.
    11	a.       Performance assessment by CAG of India b.       Performance assessment by other entities (Regulators/Government Departments) using CAG empanelled list of CA Firms.	The point score of the Parent LLP will be reduced by 10 percent in the 1st year, 20 percent in the 2nd year and will not be considered for allotment in the 3rd year, in case the performance of the Parent LLP is consistently graded less than 50 percent in the immediate preceding year and point score will be reduced by 2.5 percent in the 1st year, 5 percent in the 2nd year and will not be considered for allotment in the 3rd year in case the performance of the Partner LLP is consistently graded less than 50 percent in the immediate preceding year.
    12	Refusal of Audits allotted by CAG	In case of refusal by Parent LLP in immediate preceding year, the point score of the Parent LLP, would be reduced by 10 percent in 1st year, 20 percent in 2nd year and will not be considered for allotment in 3rd year. In case of refusal by Partner LLP in immediate preceding year, the point score of the Parent LLP, would be reduced by 2.5 percent in 1st year, 5 percent in 2nd year and will not be considered for allotment in 3rd year.

    
    

    C.      Other Notes

    ·         To be read as Note II (2).

    In case only Parent LLP is applying and no Partner LLP is applying separately for Empanelment: Parent LLP can include one Partner LLP. The choice regarding inclusion of specific Partner LLP has to be mentioned at the time of empanelment. The provision of this policy will apply as mentioned in the respective clauses.

    In case both Parent LLP and Partner LLP are applying individually for Empanelment: Both the firms will be treated separately.

    If there are more than one partner LLPs: All of such partner LLPs will have to take one decision regarding application for empanelment either applying as Parent and Partner (part of one network) or their applying individually. Any decision taken by Partner(s) LLPs with regard to application to be made for empanelment, will be binding on them till the completion of the assignment/audit cycle allotted to them.

    ·         To be read as Note C (iv) and (v) to the Rotation of audit.

     

    i.              In case of aggregation of firms, where Parent LLP is considered for allotment of audit of Maharatna Company, the cooling period after completion of audit of Maharatna Company, will be applicable on the Network. In case where Parent LLP and Partner LLP apply separately, the provision would apply individually.

    ii.            If there are more than one partner LLPs: All of such partner LLPs will have to take one decision regarding application for empanelment either applying as Parent and Partner (part of one network) or their applying individually. Any decision taken by Partner(s) LLPs with regard to application to be made for empanelment, will be binding on them till the completion of the assignment/audit cycle allotted to them.