Not every chartered accountant in the country can open an accountancy firm of his or her own. Most work for 3rd parties throughout their entire career. However, if you desire professional liberty and self-dependency, your aim should be to launch a CA firm and work as per requirements.
Here are some factors that you should consider before taking a step towards self-employment.
Educational background and qualifications
The necessities to open a chartered accountant firm are as follows –
- You must be a CA graduate from the Institute of Chartered Accountants of India (ICAI). To graduate, you have to pass the final exams and a CA articleship as well.
- Applicant must acquire a certificate of practice from the ICAI before they can join a company or launch their firm.
- Lastly, get the authorized name for your firm from ICAI.
No chartered accountancy business can operate in India without the above-mentioned qualifications.
Capital is a crucial aspect if you want to take advantage of chartered accountant practice opportunities. However, investments start right from the moment you join the chartered accountancy course.
Here is a breakdown of the expenses involved in completing the course.
- Intermediate course fee is Rs. 9,000.
- Article registration fee is Rs. 2,000.
- Fee for Common Proficiency Test is Rs. 500.
- Fee for both groups during Intermediate Exam is Rs. 1600.
- Fee for both groups during Finals Exam is Rs. 2250.
Additionally, you must pay Rs. 800 per annum for 5 years to become a member of the ICAI. After securing the membership, you need to pay Rs. 2000 each year. For the practice certificate, an additional yearly fee of Rs. 2200 must be paid every year. After becoming a CA, you can avail professional loans to sustain yourself and your business.
This certificate is essential to operate your CA firm. It is one of the crucial steps in the guide to opening your chartered accountant firm.
State approval and registrations
Another step in the process of launching your chartered accountant firm is acquiring a professional tax registration in the state of your business. Moreover, ensure you have the approval of the Municipal Corporation and the pre-requisite trade license for the company you operate.
Areas of practice
The qualities of an accountant determine their scope of practice and work. However, in most cases, CAs can find work from companies and businesses that are required to send their accounts for audit to chartered accountants. Apart from the private contracts, your firm may also be granted government audits and projects, related to accounting and taxation.
However, the work rarely starts from the 1st day of launching a CA firm. First, you need to have the business impanelled with the related regulatory authorities. Chartered accountants also have the scope of working as tax consultants for other companies and organisations.
Other things to know
Depending on the work that your company does, you may find success within the first year of operation or your firm can require several years to generate enough revenue. Even though CA firms can be greatly profitable, initiating such a business requires a substantial investment. This is why you should consider a chartered accountant loan for the firm.
However, above all, a chartered accountant must be patient and innovative to build their firm from the ground-up. Gain relevant experience from companies before launching your firm, so that you have an impressive portfolio of work to show to prospective clients. This will assure companies hiring your firm about your knowledge and expertise.
Opening an accountancy firm is easy if you follow the rules accurately. After that, you just need to work hard and take your company to the next level.