Agreement with CA (Retainership)

Each one of us, be it a corporate or a natural person deal with the Chartered Accountant (CA) for their opinion on one or more of financial transaction entered upon. We do engaged them or avail their service for matters related to Income Tax Return filing, Financial Planning andAdvisory, GST Registration and GST Return, Tax Audit and other audit work.




However, many a time a fear revolves in mind of unintended disclosure of confidential data or information shared with him. Disclosure of confidential information is only one set of example of fear, there might be other scenario also like delivery time, IPR right, Ownership, liability etc.



To evade the fear of confidentiality, ownership, on time delivery etc. and to protect our interest,  it becomes essential to execute proper document/ agreement with the Chartered Accountant while undertaking his services.



So, in this article we have tried to curtail out the above difficulties and list out the major clauses to be inserted to protect the interest of the recipient of the service or Service Recipient (Client)  as well as the Service Provider (CA).

1. Date and place of execution: Agreement must specify the date and place of execution. Date is utmost important to check the validity under the Limitation Act. Any legal action can be initiated only if the legal action undertaken against the act is not time barred. Further, if place is mentioned, it becomes easy to identify place where stamp duty in case of registration is to be paid.
2. Details of the Parties: The details of the parties i.e. their name, Father’s Name, Address, Age and in case of non individual’s(Company, LLP, Partnership Firm) details of the entity and the mode of authorisation should be stated for easy identification.
3. Scope of work: It is utmost vital to decide the scope of work at early stage of the transaction, so that service under the agreement can be performed and completed within the agreed time period. Further how the changes under the scope of work and would be the charges for the same shall also be mentioned in the agreement itself in order to remove the ambiguity in the mind of both the parties at later stage.
4. Commercials:Charges for the professional service must also be specified in black and white. Further whether such charges shall be inclusive of taxes or not also needs to be specified.

It is also important to mentionthat how the payment would be cleared and what would be the payment cycle i.e. monthly, quarterly, half yearly or yearly.

5. Duration of the Deed: The deed should specify the duration or the term for which the agreement is entered upon by the Parties. On the expiry of the term, the agreement stands terminated or if agreed upon by the parties may be renewed.
6. Duties of the CA: There must be some certain duties on the part of the CA which needs to be fulfilled by him and be stated specifically. The Service Provider shall provide the services with due care and diligence and to such standard of quality as expected by the Company.

• – The Service Provider shall put the best team, keeping in mind the requirement of the assignment in order to complete the same on time.

• – The Service Provider shall be responsible for the timely delivery of the Services and deliverables;

• – The Service Provider should ensure that he will not disclose the nature or results of any of the Service Provider’s work with the Company to any third party.

• – The Service Provider shall abide by all the laws, rules and regulations while discharging the duties with regard to aforesaid Scope of Work.

7. Duties of the Service Receiver: There must be some certain duties on the part of the Service Receiver which needs to be fulfilled by him and be stated specifically. For eg:

• – To provide time to time support and documents to the CA to complete the work within agreed time period;
• – Timely payment of charges of CA

8. Intellectual Property Right: In case any IPR is being created out the work assigned to the chartered accountant, then who will become the owner of such IPR, this has to be stated clearly under the agreement.

9. Confidentiality: This is very crucial point of the agreement and to be drafted in details as all the information, document shared under the agreement to the Chartered Accountant shall be considered confidential and no disclosure shall be made by him without prior approval of the Client.

10. Ownership of the Document: Details needs to be mentioned like who will be the owner of information’s/ documents produced or developed out of the work assigned to the Chartered Accountant by the Client.

11. Additional Miscellaneous clauses:

• a. Relationship: relationship between the client and chartered accountant shall be of principal to principal. It means neither party shall be liable for the wrongful act of other party nor there shall not be any agent to principal relation.

 

• b.Termination: Terms for how the agreement would be treated as terminated and what would be the timeline for termination of agreement.

 

• c. Assignment: Whether the work given to the chartered accountant can be assigned/ transferred by him to any third party or not, this has to be specifically specified.

 

• d. Service of Documents: The address of the parties where all official communication to be served should be mentioned in the agreement. In case of any communication, the documents could be couriered/ posted at the address provided above.

 

• e. Copies of Agreement: To ensure originality and to avoid temperament with the deed, one can state the number of original copies signed by the parties.

 

• f. Damages and indemnity: In case any damage is incurred by one of the Party due to the fault of the other, then the other party shall indemnify the party who have suffered loss.

 

• g. Jurisdiction: In case any dispute arises, the area of jurisdiction where any legal petition can be filed should also be mentioned in the agreement.

 

• h. Arbitration Clause: If the Parties mutually agree to resolve any dispute out of the Court, then this clause will help them to resolve the matter through arbitration.

Conclusion: Above are the few major clauses which needs to be catered in the agreement while entering into any transaction with Chartered Accountant. Other suitable clauses can also be added subject to mutual discussion between both the parties and depending upon the nature of transactions.

Hope this article has helped you to understand the things to be covered under the agreement with Chartered Accountant. In case you need any assistance from our side, please feel free to contact us at complianceship@gmail.com and +91-8010233173 or visit our website www.complianceship.com