Transfer of Goodwill of Chartered Accountant Firms
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Transfer of goodwill of the firms of Chartered Accountants are permitted by the Institute subject to fulfillment of the following procedures :-
An application in writing should be forwarded by a member, holding Certificate of Practice, intimating his intention to purchase goodwill.
The application should be made within 1year from the date of death of the member.
The application should be sent alongwith the following details :-
Death Certificate' of the deceased member; and
(i) A draft sale deed for sale/transfer of goodwill entered into between the legal heir/s of the deceased and the member intending to purchase goodwill.
(ii) The sale of goodwill deed must be very clear as to the amount of consideration and payment thereof in one or more instalment(s) to be paid within a specified period. The consideration should not be contingent upon future profit.
Documents, such as, succession certificate or will, legal Heir Certificate or an affidavit sworn by all legal heir/s stating that there is/are no other legal heir to the deceased member.
Legal heir, in this context, means spouse, child/children and parents.
If the agreement is entered into by one of the legal heirs, 'No Objection' from the other legal heirs, except those minor, are also required to be submitted. In case of minor, 'No Objection' is to be obtained from the guardian.
The member intending to purchase the goodwill should give an advertisement about his intention to purchase such goodwill, and the advertisement should spell out that anyone having objection thereto should send the objection directly to the respective DCO (address of which shall be indicated in the advertisement). A copy of the advertisement so published should be sent by the intending purchaser to the concerned DCO.
Within 30 days of the receipt of the approval, for transfer of goodwill, Form '18' should be filed by the member purchasing the goodwill.
The members are requested to comply with the above procedure and submit documents mentioned above, while applying for transfer of goodwill of a Chartered Accountant Firm.
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