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Prescribed conditions

Accounting and Corporate Regulatory Authority (Prescribed Accounting Services and Conditions) Regulations 2023

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—(1) For the purpose of section 35C(2)(c) of the Act, the conditions are —(a)the application must be accompanied by a fee of $400; and(b)one of the following conditions (whichever is applicable) is met:(i)if the entity is a corporation, it is covered by professional indemnity insurance for an amount that is not less than the highest of the following:(A)$1 million;(B)the product of $500,000 and the total number of directors of the corporation;(C)a sum equal to two and a half times the gross income of the corporation in the last completed financial year of the corporation (if applicable), subject to a maximum sum of $50 million;(ii)if the entity is a proposed corporation, the promoter of the proposed corporation satisfies the Authority that the proposed corporation will, at its incorporation, be covered by professional indemnity insurance for an amount that is not less than the higher of the following:(A)$1 million;(B)the product of $500,000 and the total number of directors of the proposed corporation;(iii)if the entity is a limited liability partnership, it is covered by professional indemnity insurance for an amount that is not less than the highest of the following:(A)$1 million;(B)the product of $500,000 and the total number of partners of the limited liability partnership;(C)a sum equal to two and a half times the gross income of the limited liability partnership in the last completed financial year of the limited liability partnership (if applicable), subject to a maximum sum of $50 million;(iv)if the entity is a proposed limited liability partnership, all the persons who are to be partners of the proposed limited liability partnership satisfy the Authority that the proposed limited liability partnership will, at its formation, be covered by professional indemnity insurance for an amount that is not less than the higher of the following:(A)$1 million;(B)the product of $500,000 and the total number of partners of the proposed limited liability partnership;(v)if the entity is a firm, it is covered by professional indemnity insurance for an amount that is not less than the highest of the following:(A)$1 million;(B)the product of $500,000 and the total number of partners of the firm;(C)a sum equal to two and a half times the gross income of the firm in the last completed financial year of the firm (if applicable), subject to a maximum sum of $50 million;(vi)if the entity is a proposed firm, all the persons who are to be partners of the proposed firm satisfy the Authority that the proposed firm will, at its formation, be covered by professional indemnity insurance for an amount that is not less than the higher of the following:(A)$1 million;(B)the product of $500,000 and the total number of partners of the proposed firm.(2) In this regulation —“financial year” —(a)in relation to a corporation or limited liability partnership, means the period in respect of which the financial statements of the corporation or limited liability partnership are made up, whether the period is a year or not; and(b)in relation to a firm, means the period in respect of which the statements of accounts of the firm are made up, whether the period is a year or not;“professional indemnity insurance” includes insurance indemnifying a corporation, a firm or a limited liability partnership against liability to compensate a third party who has sustained financial loss or other damage or injury due to a breach of professional duty or to any professional negligence on the part of such corporation, firm or limited liability partnership, as the case may be (including any such negligence by any director of such corporation, any partner of such firm or any partner of such limited liability partnership), or fraud or dishonesty.

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