Page 190 - Quick Insights Book 2022

Ann. 15 – ICAI Rules of Merger & Demerger of CA Firms

2. That this merger will come into force w.e.f. ________________ 20XX, whereafter, the merging firm i.e. M/s A & Co.,
and M/s B & Co. cease to exist and a separate partnership deed has been executed on _______________ amongst
the partners of the merged firm.
3. That the following persons are the partners of the merged firm:
1. Mr. ________________________ Membership No. __________________________________
2. Mr. ________________________ Membership No. __________________________________
3. Mr. ________________________ Membership No. __________________________________
4. Mr. ________________________ Membership No. __________________________________
5. Mr. ________________________ Membership No. __________________________________
6. Mr. ________________________ Membership No. __________________________________
7. Mr. ________________________ Membership No. __________________________________
8. Mr. ________________________ Membership No. __________________________________
We, all the partners of the merged firm ……………………………………… understand that this merger has the following
consequences in pursuance to the decision of the Council of the Institute: -

1. That the name of the erstwhile merging firms will be frozen by the Institute.
2. And in case 75% or more of the continuing partners of one or more erstwhile merging firm(s) are willing to demerge,
they may demerge after giving due notice and will be entitled to the following benefits :
(i) They shall be entitled to the total seniority acquired i.e. their earlier pre-merger seniority and the years during
which they were in merged firm.
(ii) They are entitled to their old firm’s name.
Provided in case, 75% is a fraction, then the same shall be rounded off to the next number.

3. That the date of establishment of the new demerged firm shall be the date of demerger.
4. That to effectuate such demerger, no concurrence/acceptance is required from the other continuing partners of the
merged firm. The partners of such demerged firm shall execute a partnership deed. The merged firm as well as the
demerged firm shall submit fresh Form 18 as prescribed under the Chartered Accountants Regulations, 1988 to the
Institute within the prescribed period.
5. In case of 75% or more of the continuing partners of one of the erstwhile merging firm have demerged after giving
due notice to the other partners, then in such case, the merger shall come to an end and if the remaining erstwhile
merging firms/partners of the erstwhile merged firm decided to continue, then they should enter into a fresh Merger/
Partnership Agreement and shall submit fresh Form 18 as prescribed under the Chartered Accountants Regulations,
1988 to the Institute within the prescribed period.
6. That the demerger in the manner hereinbefore mentioned can be demanded only within a period of 5 years from
the date of merger.
IN WITNESS WHEREOF, the Partners of the Merged firm M/s ______________ hereto set their hands on this agreement in the
presence of the witnesses.
WITNESSES : (i)
1. (ii)
2. (iii)
(iv)
(v)
(vi)
(vii)
(viii)
Partners of M/s…………………

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