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520.1 |
Unless appropriate arrangements have been made, the continuing
incapacity or death of a sole practitioner will cause considerable
difficulty and inconvenience to clients. Furthermore, the resultant
interruption of services will diminish the value of the practice and may
even lead to its disintegration.
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520.2 |
It is therefore important for a sole practitioner, to protect both his
or her own interests as well as the interests of the clients, to enter
into such arrangements with another member or member firm as will enable
the practice to be carried on with a minimum of dislocation in the event
of incapacity or death. |
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520.3 |
Such arrangements should be made within two (2) years from the date the
sole proprietorship was set up and should provide, so far as possible,
for the practice to be continued as a going concern until such time as
the sole practitioner recovers or the representatives of his or her
estate decide to dispose of the practice. |
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520.4 |
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(1) |
A member in public practice who is a sole practitioner is required to
enter into an arrangement to enable the practice to continue with
minimum disruption in the event of death or incapacity, in either of the
following ways:
(a) by entering into an agreement with another sole practitioner or with
a member firm; or
(b) by satisfying the Council that other adequate provision has been
made. |
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(2) |
Members in public
practice shall ensure that their executors and family are aware, in the
event of death or incapacity, of the arrangements made for the
management of the practice. |
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520.5 |
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(1) |
An arrangement, reciprocal or otherwise, between two sole practitioners
may be appropriate. Alternatively, in many cases it will be advantageous
for a sole practitioner to enter into an arrangement with a member firm. |
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(2) |
Although such an arrangement may take the form of an agreement to
manage, an arrangement for the sale of the practice on a
predetermination basis may in many cases be more satisfactory. |
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(3) |
When such arrangements are under consideration, the compatibility of the
respective practices, especially in relation to audit procedures, fees
and the general state of the work in both offices, should be borne in
mind. |
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