Admission of Company to Membership
Admission to Corporate Membership.
- (1) The Council may admit as a corporate member any company incorporated in and under the laws of Bermuda where -
- a principal object of the company is to practice as a public accountant in accordance with the Act;
- not less than sixty percent of the issued shares in the capital of the company are registered in the names of and beneficially owned by one or more individuals each of whom is a member in good standing of the Institute, and the remainder (if any) are registered in the names of and beneficially owned by one or more individuals each of whom is a member in good standing -
- of a provincial institute, the Institute of Chartered Accountants of Scotland, The Institute of Chartered Accountants in England and Wales, or The Institute of Chartered Accountants in Ireland, or
- of another body having objects similar to those of the Institute and who has complied with the recommendations of the International Qualifications Appraisal Board of the Canadian Institute of Chartered Accountants concerning admission to membership in provincial institutes (except recommendations with respect to satisfying provincial institute course and examination requirements);
- every director of the company is an individual who is a member in good standing of the Institute; and
- none but directors of the company have authority to issue on behalf of the company, in the course of services performed by the company in its practice as a public accountant, an opinion, report or certificate concerning any financial or accounting statement where a purpose in performing such services is to enhance the credibility of such a statement.
(2) Application for admission as a corporate member shall be made in a form prescribed by the Council, and shall include a declaration in writing by two directors of the applicant company that the conditions set out in paragraph (1) are satisfied by the company.
(3) A corporate member shall enjoy all the rights and privileges, and be subject to all the obligations, of members of the Institute except that -
- a corporate member shall not be eligible for election to the Council or to an office;
- a corporate member shall not be eligible for appointment to a nominating committee, a practice inspection committee, a professional conduct committee, a discipline committee, an appeal committee or any other standing or ad hoc committee of the institute, or as a scrutineer or a proxy; and
- a corporate member shall not be entitled to vote on any matter which may come before a general meeting of the Institute, or which is the subject of a ballot taken by mail or electronic means, except a resolution to make, amend or repeal a by-law, or a rule of professional conduct, in a manner which will affect differently the rights, privileges or obligations of corporate members and of individual members and no such resolution shall be deemed passed unless passed by a majority of the votes of both corporate members and individual members voting thereon.
Professional liability insurance
- (1) Professional liability insurance coverage as prescribed in paragraphs (3), (4) and (5) shall be maintained by -
- every firm or corporation in Bermuda engaged in the practice of public accounting, and
- every member engaged in the practice of public accounting in Bermuda as a sole proprietor.
provided that, in such circumstances as the Council may approve, particularly where a member, firm or corporation is unable to obtain insurance coverage on reasonable terms, such member, firm or corporation may set aside assets at least equal in value to the amount of insurance coverage prescribed in paragraph (4) in lieu of such insurance and further provided that professional liability insurance coverage as required by this by-law 50 shall not be required for a member practicing public accounting exclusively for a Government Department.
(2) A member, firm or corporation engaged in the practice of public accounting shall file with the Institute satisfactory proof of the maintenance of professional liability insurance coverage as required in paragraph (1) in a form satisfactory to the Council -
- within two months of the date of commencement of the practice of public accounting in Bermuda, and
- thereafter, within two months of the expiry date specified in the insurance policy in force at the date of the last filing of proof of professional liability insurance coverage.
(3) Where a member, firm or corporation has set aside assets in lieu of such insurance in accordance with paragraph (1), such member, firm or corporation shall file annually with the Institute a certificate certifying that it has set aside assets at least equal in value to the amount of the insurance as prescribed by paragraph (4) in a form satisfactory to Council.
(4) The amount of insurance maintained by such members shall be at least equal to the lesser of -
- $1,000,000 for each member who, as applicable, is an employee, partner, proprietor or director (each, for the purpose of this by-law, a "relevant member"); and
- If the firm is not a corporation -
- $1.5 million where the number of relevant members is equal to or less than three; and
- $2.0 million where the number of relevant members is greater than three; or
- If the firm is a corporation -
- $1.5 million where the number of relevant members is equal to or less than three; or
- $2.0 million where the number of relevant members is equal to or less than nine; or
- $5.0 million where the number of relevant members is equal to or less than 24; or
- $7.5 million where the number of relevant members is equal to or less than 34; and
- $10 million where the number of relevant members is 35 or more.
(5) In the event of -
- the withdrawal of a partner from a practice of public accounting, whether or not that partner continues to carry on the practice of public accounting elsewhere; or
- the merger, dissolution or cessation of practice of a firm, proprietorship or partnership engaged in the practice of public accounting; or
- the suspension, revocation or non-renewal of a corporation's registration certificate, or the dissolution or discontinuance of a corporation;
the professional liability insurance that was required to be carried pursuant to paragraph (1), or the assets set aside in lieu of the insurance, prior to the occurrence of the event referred to in (a), (b) or (c), shall continue to be maintained for a period of at least six years following the event to cover acts or omissions occurring prior to the event.
(6) Every professional liability insurance contract shall be endorsed with the requirement that the insurer notify the Institute immediately of -
- the cancellation of the insurance coverage; or
- the reduction of the insurance coverage below the level required pursuant to paragraph (4).
Where a member, firm or corporation has set aside assets in lieu of insurance, it shall notify the Institute immediately in the event that the value of such assets falls below the level prescribed in paragraph (4).
(7) A member, firm or corporation who has not filed by the date prescribed in paragraph (2) proof of the maintenance of professional liability insurance coverage or a certificate of the value of assets set aside in lieu of insurance shall be required to remit a late filing fee of $500 or as otherwise determined by the Council.
(8) In the event professional liability insurance coverage is not maintained or sufficient assets are not set aside as required by paragraph (1) or satisfactory proof of such coverage or a certificate that such assets have been set aside is not provided to the Institute as required by paragraphs (2),and (3) then:
- in the case of a firm engaged in the practice of public accounting in Bermuda, the rights and privileges of membership in the Institute of the partners of the firm shall be suspended;
- in the case of a corporation practicing public accounting in Bermuda, the rights and privileges of the corporation and each director of the corporation shall be suspended;
- in the case of a member engaged in the practice of public accounting in Bermuda as a sole proprietor the rights and privileges of membership in the Institute of the member shall be suspended.
(9) A person whose rights and privileges of membership in the Institute have been suspended shall be reinstated to membership in good standing effective the date upon which satisfactory proof of the required coverage or a certificate that sufficient assets have been set aside, together with a reinstatement fee in the amount of $1,000 or as otherwise determined by Council and the late filing fee prescribed by the Council, are received by the Institute.
(10) Subject to paragraph (2) and (3), in the event a person whose rights and privileges of membership in the Institute have been suspended pursuant to paragraph (8) remains suspended for a period of thirty (30) days, that person's membership in the Institute shall be terminated.
(11) A person whose membership has been terminated pursuant to this by-law shall be entitled, on paying the reinstatement fee required in paragraph (9), to apply for re-admission under by-law 7.
(12) Where -
- a member's practicing unit is the subject of a practice inspection; or
- a member is the subject of an investigation or a charge made by the professional conduct committee; or
- a member has not fully complied with an order of the discipline committee or the appeal committee,
his or her membership shall not be terminated until the practice inspection or professional conduct committee investigation has been completed, or the final disposition of the charge has been made, or the member has fully complied with the discipline or appeal committee order, as the case may be.
(13) Members shall have until January 1, 2007 to obtain the professional liability insurance coverage required pursuant to this by-law