Do you have to be an Accountant to own a share in an Accountancy Firm?
A friend of mine and her husband set a company up in name only for future use. They had one share in it each. Now her husband who is a qualified Accountant has started to trade under this name and has told her that because she is not an Accountant she can not be a shareholder and has given her a document to sign transferring her share to him.
Small Business - 3 Answers
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Answer 1 :
Well depending upon the rules of the domicile wherein you reside, I believe that in the medium of a "company" whether it is be private or publically limited...it doesnt matter what profession you are in so long as you are a shareholder you are protected by various case law edicts. However the vast majority of accountancy firms are partnerships (as are most professional associations), which in the UK are majorly limited liability partnerships (LLPs) and to be a "partner" you must be able to contribute to the workings of the business, i.e. be an accountant in an accounting LLP. Hope this helps
Answer 2 :
I am an accountant by birth and by profession, what this fellow is doing it is a snub to the accounting profession. The basic accounting principle that is universal is called an "Accounting Entity" this states that an entity is separate and distinct from its owners. Owning a company is one thing and running a company is another. The shareholder is not Neccesarily required to perform an accounting activity be it an operations for the firm or as a product to the clients. An owner has a right to benefit from the proceeds of the firm or suffer a loss when things are not doing fine. To prove what I am saying, let the wife ask the registering authority why they registered the firm while knowing that one of the owners is not an accountant by profession. Who is to determine the legal member should be the registering authority not the members. Unless it is confessed that they furnished false information at the time of registering the firm.
Answer 3 :
In short owning part of a business and working for that business are different animals. I'm sure Peter Jones or any other investor may own shares in an accountancy business but are not qualified accountants. After all is Richard Branson a qualified train driver. You do not need to be qualified to own shares in any business, a knowledge of that business is helpful but not the be all and end all. So in answer to the question, you don't need to be an accountant to own the shares. After saying that to give a better answer you would need to know the legal entity of the business, ie is it a partnership, an LLP or an Limited company, and the accountancy body that provided his qualification. it may be that the accounting body that the husband is a member of, may not allow the use of that bodies logos etc if not all partners in the business are of the same level of qualification. To call a firm chartered may be considered passing off if only one partner is chartered and the other 3 are not.
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