A clutch of amendments to the Companies Act 2013 is on the anvil to remove the regulatory hurdles that stand in the way of the growth of multidisciplinary partnership (MDP) firms of professionals.
According to sources, these amendments, now being prepared by the ministry of corporate affairs, would make it easy for the chartered accountants (CAs), company secretaries, cost auditors, and actuaries to form MDPs that could provide both regulated and unregulated professional services.
“The government wants to bring everyone on board. It will require amendments in different sections of the Companies Act. The directive from the Prime Minister’s Office (PMO) is to create firms that can offer all services under one umbrella, and compete with the Big Four,” one of the sources said.
Currently, there are various restrictions specified in the Act that hinder the growth of professional partnership firms.
Under Section 141, for instance, an auditing firm can be appointed as a company’s auditor only if a majority of its partners practising in India are qualified CAs. Similarly, Sections 148 and 204 apply to the cost auditors and company secretaries, respectively.
However, in an MDP structure with multiple partners from different professions, such “restrictive” regulations might not work.
“Alternatively, the government can bring in a new section within the Companies Act that will allow formation of MDPs that can operate without any limitations mentioned in the Act,” the source said.
In 2021, the Institute of Chartered Accountants of India (ICAI) released MDP guidelines but it faced opposition from other professional regulatory bodies like ICMAI, ICSI due to some restrictive provisions.
Regulated services include auditing, secretarial, cost auditing, and legal under a single firm. Unregulated services are consulting, advisory, forensics, management, etc. Large-size MDPs in the world offer all these and more services, with seamless coordination to the benefit of large corporate groups.
To tackle these regulatory shortcomings, the ministry initiated a public consultation in September 2025 to bring about a more relaxed framework for establishing MDPs in India.
“In India, restrictions on MDPs prevent professionals from working together under a single firm structure. As a result, they often operate in silos, limiting collaboration and the ability to offer integrated services like those provided by international firms. This restriction makes work less efficient, limits new ideas, and stops Indian professional firms from growing into full-service firms that can compete at the international level,” the discussion paper noted.
Simultaneously, an inter-ministerial panel headed by Shaktikanta Das, the principal secretary to the Prime Minister, is planning a slew of changes in the current regulations to put into action the agenda of creating large Indian advisory and audit firms that can compete with the Big Four – EY, KPMG, PricewaterhouseCoopers, and Deloitte.
These include easing curbs on advertising by CAs, company secretaries, cost auditors, lawyers, etc. Also, a proposal to restrict the participation of foreign advisory firms in government contracts is being discussed.
The Big Four have been able to scale up by offering specialised services such as valuations, cyber and IT risk evaluation, taxation, forensics etc in addition to providing statutory services. “The current law prohibits Indian CAs and audit firms from taking on non-Indian CAs as partners and limits opportunities to raise capital and scale as well as forces firms to operate under alternate practice structures,” said a Grant Thornton Bharat note.
Countries such as the US, UK, Australia, and Canada allow firms to operate as a single entity providing both regulated and unregulated services with certain safeguards like mandating control to be retained by the domestic qualified individuals.