LLP of CAs Not to be treated as Body Corporate
UNDER section 226(3)(a) of the Companies Act, 1956 a body corporate is disqualified from appointment as auditor by a company. Since LLP is a body corporate as per section 3(1) of the Limited Liability Partnership Act, 2008, LLP among Chartered Accountants will not be qualified for appointment as auditor under section 226(3)( a ) of the Companies Act, 1956.
The Institute of Chartered Accountants of India has represented against this and now MCA - Ministry of Corporate Affairs has clarified that Limited Liability Partnership of chartered accountants will not be treated as body corporate for the limited purpose of section 226(3)(a) of the Companies Act, 1956. Notification has been sent for publication in the Gazette of India and will be hopefully published soon.
MOC CIRCULAR NO. [NO. 02/02/2011-CL.V]; Dated : May 26, 2011