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Practice Entity Membership

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What is practice entity membership? 
 
Practice entity membership is an optional form of membership for a practice entity which complies with Regulation 1205. Practice entities which comply with Regulation 1205 are those entitled to use the ‘Chartered Accountants’ description. 
 
Practice Entity Membership is not a substitute for individual membership of the Institute. Eligiblity for this form of membership relies on an entity being controlled by members holding CPPs or affiliate members, as set out in Regulation 1205.  
 
Why would I want to apply for practice entity membership? 
 
Under Professional Standards legislation, the benefit of the cap will only apply where the act or omission is that of a member of the Institute. 
 
In the event of a claim, it is possible that any services provided through an incorporated practice entity may be considered to be the primary responsibility of the incorporated practice entity. If that is the case it will only be where that incorporated practice entity is a member of the Institute that the incorporated practice entity and its officers will get the benefit of the cap on liability.  
 
How do I apply for practice entity membership? 
 
Regulations 601 to 609 –‘ Regulations relating to approval for Practice entity membership’ set out the process of applying for practice entity membership. 
 
Briefly the requirements for a Practice entity member are as follows:

  • The company must be an entity entitled to use the Chartered Accountants description, i.e. an entity complying with Regulation 1205.
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  • Evidence of the practice entity ownership and control must be provided
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    • Undertakings must be given that:
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    • the Institute will be advised of any change in composition of the company,
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    • the Institute will be provided with information relating to claims data and PI insurance arrangements if requested
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    • the number of member employees of the practice entity will be confirmed if requested by the Institute
  • Confirmation of PI insurance which complies with the Institute’s regulations must be provided
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  • An authorised individual member must agree to comply with the Quality Control requirements in Regulation 710
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  • The application form is to be submitted together with an application fee of $500, together with evidence of the practice entity ownership and control and undertakings required in Regulations 604 and 607.
Fees relating to Practice entity membership 
 
The application fee of $500, which is to cover administrative costs of processing applications is to be paid at the time of lodgement of applications. 
 
An annual fee of $55 will be payable to the Professional Standards Council for practice entity members as for other participating members of schemes. This will be recovered from practice entity members at the time of approval of the initial application and thereafter will be billed as part of the annual membership subscription process.