Practice Continuation Agreement Between

SAMPLE OF

PRACTICE CONTINUATION AGREEMENT BETWEEN

A SOLE PRACTITIONER AND A FIRM

Section 520 of the Malaysian Institute of Accountants

By-Laws (On Professional Ethics, Conduct and Practice):

Death or Incapacity of a Sole Practitioner

PLEASE READ CAREFULLY BEFORE PROCEEDING

This Sample Agreement is solely meant as guidance for public practitioners operating under a sole proprietorship who are desirous to enter into an agreement for continuity of practice in the event of death or incapacity of the sole practitioner.

Practitioners are strongly advised to consult a solicitor before entering into an agreement of this nature.

Please also read the Institute’s ‘Outline of the Salient Clauses of Practice Continuation Agreement’ and ‘Guidelines’ for more information.

THE INSTITUTE DISCLAIMS ANY AND ALL LIABILITY HOWSOEVER ARISING OUT OF THE RELIANCE ON AND/OR USAGE OF THIS SAMPLE.

Cover Page

PRACTICE CONTINUATION AGREEMENT for

Firm Name : ______

Firm No. : ______

Firm Address : ______

Between

[Full name of Sole Practitioner as per National Registration Identity Card (NRIC)]

And

[Full name of Firm as registered with the Malaysian Institute of Accountants (MIA) and Firm No.]

Prepared by:

PRACTICE CONTINUATION AGREEMENT

THIS AGREEMENT is made this ______day of ______20____

BETWEEN ______(NRIC No. ______)

of ______

(hereinafter referred to as “Practitioner”) of the one part;

AND ______(Firm No. ______)

of ______

(hereinafter referred to as “the Firm”) of the other part

WHEREAS the Practitioner is a Chartered Accountant in sole practice under the name of

______(Firm No. ______)

WHEREBY IT IS AGREED between the parties hereto as follows:

1. Recitals

(a) “MIA” means the Malaysian Institute of Accountants.

(b) The “Practitioner” is an active Chartered Accountant registered with the Malaysian Institute of Accountants and is the sole proprietor of [Firm Name (Firm No.)] located at [Firm’s Address] (hereinafter referred to as “the Practice”).

(c) The “Firm” is a firm registered with the Malaysian Institute of Accountants under the firm name of [Firm Name (Firm No.)] located at [Firm’s Address].

(d) “continuing incapacity” means in relation to [Practitioner’s Name] that he has a written medical certificate from a properly qualified medical practitioner stating he is unfit through illness, accident or otherwise from effectively carrying out his practice and is likely to be so incapacitated for a period not less than _____ weeks.

(e) “representative(s)” means in the case of the Practitioner, his wife, his solicitor, his doctor or any two such persons.

(f) “personal representative(s)” means the person(s) named as executor(s) in relation to the will of [Practitioner’s Name] or, in the case of intestacy, the person(s) who is granted the letters of administration of his estate.

The Practitioner hereby intends to appoint the Firm to manage the Practice upon death or continuing incapacity of the Practitioner and the Firm has agreed to such appointment subject to the terms and conditions of this agreement.

2. Warranties, Representations and Indemnity by the Practitioner

(a) The Practitioner has not made any practice continuation agreement/arrangement with any other party as at the date of this agreement.

(b) All information and documents revealed and disclosed to the Firm in the course or negotiation are accurate and true in all aspects.

(c) The Practitioner shall notify MIA of this practice continuation agreement and inform MIA accordingly of any change or termination of the agreement.

(d) The Practitioner shall ensure that all proper documentation, including but not limited to any will have been drafted to enable the continuity agreement to come into force.

(e) The Practitioner shall carry out the Practice in a professional manner, comply with all the relevant rules and requirements of the relevant authorities and keep the firm adequately insured.

3. Undertakings by the Firm

3.1 In the event of continuing incapacity of [Practitioner’s Name], the Firm shall, when requested to do so in writing by [Practitioner’s Name], and/ or his representative and on receipt of a medical certificate, manage the Practice of [Practitioner’s Name], on the following terms and conditions:

(a) The Firm shall carry on the Practice under its existing name in a manner befitting the profession and shall take all reasonable steps to preserve the goodwill of the Practice. The Firm shall at all times comply with and abide by all relevant rules and regulations that are applicable to the Practice, including but not limited to the MIA’s By-Laws (On Professional Ethics, Conduct and Practices).

(b) The Firm shall notify the clients of the Practice and other parties concerned that the Firm will be managing the firm temporarily.

(c) The Firm shall inform the insurers of the Practitioner’s professional indemnity policy of the agreement and obtain extra cover necessary for the Firm and other employees on behalf of the Practitioner.

(d) The Firm shall be entitled with the consent of the Practitioner or his representative(s) (which shall not be unreasonably withheld) to –

(i) operate the bank accounts of the Practice.

(ii) sign letters and other documents in the name of [Practitioner’s Name].

(iii) employ staff, whether his own or otherwise, to assist with the running of the practice.

(e) The Firm shall keep all books of accounts and other records of the practice up to date. It shall also invoice clients of the Practitioner in accordance with the usual procedures of the Practice, and ensure that all relevant returns are submitted in respect of Income Tax, Service Tax and any other matters.

(f) The Firm shall make arrangements for the payment of the Practitioner’s annual subscriptions and practising certificate as and when it becomes due and payable.

(g) The Firm shall be remunerated for the work carried out from the practice at a rate agreeable to both parties. The Firm shall also be remunerated for any expenses reasonably incurred while managing the practice.

3.2 In the event of the death of [Practitioner’s Name], the Firm shall, when requested to do so in writing by the personal representative(s) of [Practitioner’s Name], shall manage the Practice of [Practitioner’s Name], on the following terms and conditions:

(b) The Firm shall notify MIA on the passing of [Practitioner’s Name] with a copy of the death certificate, and of this agreement.

(c) The Firm shall inform the insurers of the Practitioner’s professional indemnity policy of the agreement and ensure that there is uninterrupted professional indemnity cover and other necessary insurances.

(d) The personal representative(s) shall immediately authorise the Firm to open and operate a new bank account in the name of the Practice at its existing bank to enable the business to continue pending the grant of probate of the will or the grant of the letters of administration.

(e) Prior to the grant of probate or letter of administration, all monies received by the Practice shall be paid into the new accounts.

(f) The Firm shall be remunerated for the work carried out from the practice at a rate agreeable to both parties. The Firm shall also be remunerated for any expenses reasonably incurred while managing the practice.

(g) The Firm may acquire the [Practitioner’s Name] Practice if it so wishes provided that the personal representative(s) are independently advised on the transaction.

4. Termination and Notice

4.1 This agreement may be terminated before clause 3 above come into operation by either party giving ___ months’ notice in writing to the other party.

4.2 In the case of continuing incapacity –

(a) The Practitioner or his representative(s) may terminate the agreement by giving the firm ___ months’ notice in writing.

(b) On the termination of the agreement, the Firm shall hand over the Practice to the Practitioner or his representative(s) or to any other person as directed and shall provide the necessary assistance for the handover.

(c) Where the agreement terminates in accordance to sub-clause (a) above and the Firm has not been instructed by the Practitioner or his representative(s) to whom the practice should be handed over, the Firm shall immediately report this matter to MIA and shall not then be held responsible for any liability resulting from the termination of the agreement.

Any variation of this agreement must be by mutual consent and be evidenced in writing by the Sole Practitioner and the Firm.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands the day and year first above written:-

SIGNATURE or Thumbprint

by [Sole Practitioner’s Name] )

in the presence of ) ______

SIGNATURE or Thumbprint

by [Firm’s Authorised Partner] )

in the presence of ) ______

- End of Document -

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