Is your entity a member firm?
Please use this guide to determine if your entity is a member firm and whether ICAEW is your firm’s money laundering supervisor.
If the voting rights or shares in an accountancy practice (regulated or unregulated) are held by a corporate body, you need to carefully assess if it meets the ICAEW member firm definition set out in the Principal Bye-laws.
An ICAEW member firm is:
- a member engaged in a public practice as a sole practitioner; or
- a partnership engaged in public practice of which more than 50 per cent of the rights to vote on all, or substantially all, matters of substance at meetings of the partnership are held by members; or
- a limited liability partnership engaged in public practice of which more than 50 per cent of the rights to vote on all, or substantially all, matters of substance of the partnership are held members; or
- any body corporate (other than a limited liability partnership) engaged in public practice of which 50 per cent or more of the directors are members; and more than 50 per cent of nominal value of the voting shares is held by members; and more than 50 per cent of the aggregate in nominal value of the voting and non-voting shares are held by members.
To be in public practice, an entity must provide accountancy services to clients for reward where a substantial part of the activities is the provision of such services. The Council statement on engaging in public practice defines a 'substantial part' as 10%.
Please note: new guidance takes effect from 1 January 2017. The new guidance (now called the ICAEW Statement on Engaging in Public Practice) updates and elaborates on the existing Council statement.
ICAEW member firms are automatically subject to Practice Assurance and money laundering supervision by ICAEW.
There are some common situations where firms find that they do not qualify as a ‘member firm’ under the Principal Bye-laws, including:
- a subsidiary of another corporate entity, irrespective of the ownership and activities of its parent; and
- an entity that provides less than 10% accountancy services (although if an entity provides any level of accountancy services it needs a supervisor for anti-money laundering).
If your firm is not a member firm under the definition in the Principal Bye-laws, we may still be able to supervise you for anti-money laundering under a contractual arrangement. If you think you might need a contract, please complete the application form.