3.3       Query

Change in the name of chartered accountant’s firm consequent

 to the admission of a new partner.

1.Mr. K. and Mr. T. have been carrying on the profession of chartered accountants under the name and style of M/s. B.V. & Co., since 1986 under a deed of partnership dated 1.5.1986.

2.Mr. R. was introduced as a partner in M/s. B.V. & Co., on 9.9.88 under an agreement introducing a new partner dated 12.10.88.

3.One of the conditions of the agreement introducing the new partner is: “Subject to such approvals as may be required, the name of the existing firm be changed from M/s. B.V. & Co., to M/s. B.G. & Co.”. Accordingly, approval of name was obtained from the Institute and Form no. 18 was filed with the Regional Office.    

4. Some companies have appointed M/s. B.V. & Co., as their statutory auditors. In this context, the querist has sought the opinion of the Expert Advisory Committee as to what will be the status of appointment of M/s. B.V. & Co., as the firm’s name is being changed. The querist has suggested the following three alternatives:

(a) Only the name of the partnership has been changed. The partnership is continuing. As such the audit assignments can continue in the new name of the firm after getting the same confirmed form the concerned companies. The auditors’ report has to be signed in the name of the firm as on date of the submission of the audit report in the new name.

(b) Change in name amounts to casual vacancy. As such the Board can appoint new auditors on receiving the intimation to this effect from the auditors.

(c) Due to change in name, the old firm ceases to be the auditors of the company. Hence, new auditors can be appointed only at an Extraordinary General Meeting.

                                                                                Opinion                                           September 6, 1989

1.The Committee notes that admission of a partner amounts to reconstitution of the firm. The firm, as such, is not dissolved and after reconstitution, it continues to carry on its profession in the old name for some time. The name is changed subsequently as per the terms of the agreement.

2. On the basis of the above, the opinion of the Committee on the alternatives suggested by the querist in para 4 of the query is as below:

(a) Since there is a change in the name of the firm, the firm needs to communicate the change to the companies in which the firm, under its old name, were auditors.

(b) In view of (a) above, there is no casual vacancy. Therefore, there is no question of appointment of new auditors by the Board.

(c) In view of (a) above, firm in its old name does not cease to be the auditors. Therefore, the question of appointment of new auditors in Extraordinary General Meeting does not arise.

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