Kirti, who is a Practicing Company Secretary is specialized in the areas of Secretarial Audit. On account of receiving many assignments and unable to handle the work alone, she permits Mohan, her friend who is a Company

Part I of the First Schedule to the Companies Secretaries Act, 1980 deals with professional misconduct in relation to Company Secretaries in practice. Clause 1 of Part I of the First Schedule provides that a Company Secretary in Practice shall be deemed to be guilty of professional misconduct, if he allows any person to practice in his name as a Company Secretary unless such person is also a Company Secretary in Practice and is in partnership with or employed by him. This clause read with clause 11 allow another person to practice in the name of a Company Secretary in Practice provided such other person is also a Company Secretary in Practice and is in partnership with or is employed by the Company Secretary in Practice in whose name the work is to be carried out. Two persons are said to be in Partnership when they work together on mutual faith and agency. Sharing of remuneration does not make them partners. Thus, an associate who is not a part of decision making process does not become a partner. In the given case, Practicing Company Secretary has engaged Mohan who is not a practicing Company Secretary to carry Secretarial Audit in her name. It is a misconduct on her part. Moreover, she has agreed to share 50% fees of assignment with Mohan. Clause 2 of Part I of the First Schedule does not prohibit a Company Secretary in Practice from sharing fees, commission or brokerage in the fees or profits of his professional business, with any other member of the Institute or a partner or a retired partner or the legal representative of a deceased partner. Accordingly, sharing of the fees with Mohan shall be seen as a professional misconduct on the part of Kirti. However, permitting Mohan to conduct the Secretarial Audit and give reports on her behalf will be seen as a professional misconduct under the provisions of the Company Secretaries Act, 1980.