Of late, the Indian government has been taking steps to promote entrepreneurship within the country. This spells a sharp rise in the number of enterprises. And as every company needs a chartered accountant, it is raining opportunities for chartered accountancy firms in India. If you are planning to set up your own CA firm in India, follow these fundamental steps:
Basic qualification requirements
To set up a CA firm, you need to be a qualified chartered accountant from the Institute of Chartered Accountants of India (ICAI); the proprietor must be a qualified CA himself. For a CA partnership firm, too, only qualified CAs can become partners. An unqualified CA simply cannot hire a CA as his partner for
this purpose.
Prior experience requirements
You must have prior knowledge and experience in accountancy, all kinds of audit work, presentation of financial statements, secretarial work for a company, direct and indirect taxation, general finance, TDS provisions, service tax, computer operation and data processing systems. You must also have people skills for handling clients skillfully. A minimum of 100 hours of computer training is mandatory for a new chartered accountant. A fresh CA who has articleship experience of three years and has undergone the mandatory computer course can start his own practice by getting a certificate of practice from ICAI.
Minimum manpower and real estate requirements
You can start your own practice unit even with just one or two article clerks or assistants. A minimum office space of 250 to 300 square feet is sufficient to establish the practice; this can be taken on rent for Rs. 12,000 to Rs. 15,000 per month. Alternatively, you can start your operations at home in the initial stage. Of course, your space requirements may increase in time, depending upon your volume of work.
Minimum investment requirements
The minimum investment required would be around Rs. 15-20 lakh if the office space is purchased. A further investment of Rs. 2 lakh may be required for purchasing computer systems and various books, stationery, printers, files and folders, furniture, air conditioners, etc.
Registration fees
A fees of Rs. 2,200 for an ACA for holding of certificate of practice (COP), as well as enrolment of membership fees needs to be paid to the ICAI. The professional tax registration fees and the trade license fees must also be paid to the concerned state government and the muni-cipal corporation before setting up new a CA practice unit.
Time and place to start up
A CA firm can be started at anytime, anywhere. There is no good or bad time for it in the financial cycle of an economy. However, the selection of city and place of practice is very important. Set up your firm in a place that holds potential for growth for the trade industry, commerce and MNCs where there would be a greater demand.
Establishing contact and getting clients
Contacts can be developed through your network of friends, relatives and exposure to various clients during your articleship training. You can also build contacts by attending seminars, symposiums, group discussions, study circles, or meetings conducted by the chamber of commerce or ICAI meetings. You could also benefit by offering honorary services to social organizations. The practice unit can be enrolled with various banks, the government, semi-government and private organizations.
Scope and areas of practice
The scope for a new CA firm primarily lies in the area of accountancy, auditing, financial management, company matters and management, direct and indirect taxation, project financing, insurance and investment planning, corporate
mergers and acquisition, surveyors and loss assessors, receivers and liquidators, case studies, arbitration and conciliation.
Break-even time
It takes approximately one year for a CA firm to break even. However, it may take about four to five years to be fully established in this profession. Don’t expect work to flow in from day one. The rate of success will depend upon your ability, hard work, quality of services rendered, honesty, sincerity, integrity and punctuality.
Profit margins
The margin of income in this profession is very high, provided you have sufficient volume of work. No doubt, the margin is low when you start out, but it is bound to increase gradually as your practice unit procures bigger volumes of work. A chartered accountant who puts in a reasonable level of effort can earn handsomely from the practice unit.
Temperament for success
A chartered accountant needs to be cool, soft-spoken, polite and broadminded. Continuing education programs and regular professional updating are required to succeed in this profession.
Code of conduct
The ICAI has issued a code of conduct and a statement on ethics to be followed by chartered accountants. ICAI has introduced Peer Reviews of practice units to ensure good quality of attestation work and adherence to professional standards.
For any attestation work, CAs may now have to prove credentials on the formation of an opinion. Therefore, the utmost care must be taken while conducting an audit, forming the audit report, and giving an opinion on any attestation work of the clients.
Also be vigilant about ensuring that all the necessary working papers and audit documents, based upon which the opinion has been formed, are obtained and kept in an audit file by the practice unit for future reference.
Why start a CA firm?
• High profit margins, which can easily rise to 60 percent of earnings
• Short time to get established (1 year to network and another year to get established)
• A firm with 2 to 3 assistants can earn more than Rs. 1 lakh per month within the first couple of years
• Very high return on investment
Source:- http://entrepreneurindia.in/
Basic qualification requirements
To set up a CA firm, you need to be a qualified chartered accountant from the Institute of Chartered Accountants of India (ICAI); the proprietor must be a qualified CA himself. For a CA partnership firm, too, only qualified CAs can become partners. An unqualified CA simply cannot hire a CA as his partner for
this purpose.
Prior experience requirements
You must have prior knowledge and experience in accountancy, all kinds of audit work, presentation of financial statements, secretarial work for a company, direct and indirect taxation, general finance, TDS provisions, service tax, computer operation and data processing systems. You must also have people skills for handling clients skillfully. A minimum of 100 hours of computer training is mandatory for a new chartered accountant. A fresh CA who has articleship experience of three years and has undergone the mandatory computer course can start his own practice by getting a certificate of practice from ICAI.
Minimum manpower and real estate requirements
You can start your own practice unit even with just one or two article clerks or assistants. A minimum office space of 250 to 300 square feet is sufficient to establish the practice; this can be taken on rent for Rs. 12,000 to Rs. 15,000 per month. Alternatively, you can start your operations at home in the initial stage. Of course, your space requirements may increase in time, depending upon your volume of work.
Minimum investment requirements
The minimum investment required would be around Rs. 15-20 lakh if the office space is purchased. A further investment of Rs. 2 lakh may be required for purchasing computer systems and various books, stationery, printers, files and folders, furniture, air conditioners, etc.
Registration fees
A fees of Rs. 2,200 for an ACA for holding of certificate of practice (COP), as well as enrolment of membership fees needs to be paid to the ICAI. The professional tax registration fees and the trade license fees must also be paid to the concerned state government and the muni-cipal corporation before setting up new a CA practice unit.
Time and place to start up
A CA firm can be started at anytime, anywhere. There is no good or bad time for it in the financial cycle of an economy. However, the selection of city and place of practice is very important. Set up your firm in a place that holds potential for growth for the trade industry, commerce and MNCs where there would be a greater demand.
Establishing contact and getting clients
Contacts can be developed through your network of friends, relatives and exposure to various clients during your articleship training. You can also build contacts by attending seminars, symposiums, group discussions, study circles, or meetings conducted by the chamber of commerce or ICAI meetings. You could also benefit by offering honorary services to social organizations. The practice unit can be enrolled with various banks, the government, semi-government and private organizations.
Scope and areas of practice
The scope for a new CA firm primarily lies in the area of accountancy, auditing, financial management, company matters and management, direct and indirect taxation, project financing, insurance and investment planning, corporate
mergers and acquisition, surveyors and loss assessors, receivers and liquidators, case studies, arbitration and conciliation.
Break-even time
It takes approximately one year for a CA firm to break even. However, it may take about four to five years to be fully established in this profession. Don’t expect work to flow in from day one. The rate of success will depend upon your ability, hard work, quality of services rendered, honesty, sincerity, integrity and punctuality.
Profit margins
The margin of income in this profession is very high, provided you have sufficient volume of work. No doubt, the margin is low when you start out, but it is bound to increase gradually as your practice unit procures bigger volumes of work. A chartered accountant who puts in a reasonable level of effort can earn handsomely from the practice unit.
Temperament for success
A chartered accountant needs to be cool, soft-spoken, polite and broadminded. Continuing education programs and regular professional updating are required to succeed in this profession.
Code of conduct
The ICAI has issued a code of conduct and a statement on ethics to be followed by chartered accountants. ICAI has introduced Peer Reviews of practice units to ensure good quality of attestation work and adherence to professional standards.
For any attestation work, CAs may now have to prove credentials on the formation of an opinion. Therefore, the utmost care must be taken while conducting an audit, forming the audit report, and giving an opinion on any attestation work of the clients.
Also be vigilant about ensuring that all the necessary working papers and audit documents, based upon which the opinion has been formed, are obtained and kept in an audit file by the practice unit for future reference.
Why start a CA firm?
• High profit margins, which can easily rise to 60 percent of earnings
• Short time to get established (1 year to network and another year to get established)
• A firm with 2 to 3 assistants can earn more than Rs. 1 lakh per month within the first couple of years
• Very high return on investment
Source:- http://entrepreneurindia.in/
Very informative and interesting post.It is really a big help. Thank you so much for sharing it with us.
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