What can I use a practice entity to do? 
 
You can carry out any of the functions, which you would be permitted to undertake as a member in public practice and, that the entity is permitted by law to perform. 
 
Note: legislation and other external regulatory requirements should also be considered. For example, the Corporations Act requirements for individuals to act as Registered Company Auditors restrict a corporate from undertaking audits; and the Tax Agents Registration Board’s requirements for the shareholdings of nominee companies. 
 
Who can be directors/shareholders? 
 
The Institute does not set restrictions as to who may be directors and/or shareholders of the entity. Our restrictions relate to the use of the description "Chartered Accountants" which are set out in R 9, particularly R1204-6 and following Commentary. 
 
What are the Institute's profit sharing restrictions? 
 
There are no restrictions as to who can share in the profits of the entity. 
 
Can a practice entity use the description "Chartered Accountants"? 
 
An entity may be described as “Chartered Accountant(s)” if it meets the requirements of Regulation 9, in particular R1204-1206 and following Commentary. 
 
Who is responsible for the standard of professional work? 
 
To be entitled to use the CA description only members and affiliates have responsibility for the standard of professional work. It is also their responsibility to ensure that any other owners do not exercise any control or influence (directly or indirectly) over the standard of professional work undertaken by the practice. All aspects of the practice must be conducted in accordance with the technical, professional and ethical standards laid down by the Institute. 
 
If there is any doubt about whether an entity is entitled to use the CA description, guidance and advice should be shought from the Professional Standards Team. If necessary, specific approval can be given by the Board to a particular structure. 
 
Does this mean that all consolidators will now be called "Chartered Accountants". 
 
Not all consolidator practices would be able to use the CA description. The various consolidator practices are currently based on models that differ significantly in both their ownership and management structures. However in considering this issue the Board took the view that it would not be acceptable to have different “offices” practising under a common name using different descriptions unless it can be demonstrated that they are quite separate entities. 
 
Whilst recognising the evolving nature of the marketplace and the likelihood that innovative practice structures will arise in the future the Institute’s focus has been on the principle of the individual responsibility of members for control over the standard of professional work. This principle was determined to guide our members rather than formulating a set of prescriptive rules and is expected to clarify the situation and give members maximum flexibility in how they choose to structure ownership of their practice. 
 
I'm not sure whether I'm entitled to describe the practice as "Chartered Accountant". What can I do? 
 
If there is any doubt about whether an entity is entitled to use the CA description, guidance and advice should be sought from the Professional Standards Team. 
 
If necessary specific approval can be given by the Board to a particular structure. 
 
My fellow director and/or partner is not a member of the Institute. Am I now entitled to use the CA description for the practice? 
 
Unless it can be demonstrated otherwise it would be assumed that your fellow director/partner is in a position to influence the standard of professional work. Accordingly such responsibility is not ONLY held by members or affiliates and the entity would not be entitled to use the CA description. 
 
For further information on affiliate status click here  
 
Does the practice entity need to hold a Certificate of Public Practice? 
 
No, the Institute’s requirements for CPPs relate to the individual member and their activity in providing services to the public, rather than the practice entity. Members are therefore required to hold the CPP and are subject to the associated requirements, in particular the Quality Review Program. 
 
The Board has confirmed that all members who were formerly partners or directors of a public practice entity who now offer public accountancy services as principals through a consolidated practice are required to hold a current CPP. 
 
A broader review of the regulations relating to CPPs is presently being undertaken to ensure that they continue to reflect contemporary practice structures and the Institute’s public interest obligations. 
 
For further details of the requirements to hold a CPP click here 
 
Does the practice entity need to have Professional Indemnity Insurance? 
 
Yes, the member and the entity is required to have professional indemnity insurance cover. 
 
For further information of the requirements for Professional Indemnity Insurance - Click here.  
 
Does the practice entity have to meet any capital requirements? 
 
The capital requirements of R1106 can be summarised as:

• The amount of the net tangible assets of a practice entity shall not be less than the excess payable under the PI insurance policy.