Alternative Practice Structures and Private Equity

Private equity firms are increasingly recognizing the value and potential of accounting practices, leading to a surge in investment across the globe. While some firms are exploring alternative practice structures that would allow them to leverage capital-driven growth, Firms operating in Ontario are reminded of the registration requirements in Ontario that do not permit private equity structures.

In Ontario:

• Regulations require 100% CPA ownership. All partners or shareholders must be CPA Ontario members as per the Partnerships Act, R.S.O. 1990, the Business Corporations Act, 1990 and the Chartered Professional Accountants of Ontario Act, 2017.
• All firms providing accounting services to the public, or engaged in the practice of public accounting, are required to register with CPA Ontario and only the following corporate structures are permitted:
  • sole proprietorship
  • general partnership
  • limited liability partnership
  • professional corporation

Furthermore, no member or student can engage in the practice of public accounting or in providing accounting services to the public except through a firm that is registered with CPA Ontario.

Members should consult the CPA Code of Professional Conduct when assessing alternative practice structures for restrictions and rules surrounding association with unregistered entities as a means to facilitate private investment.

Often, services to be provided through alternative practice structures would still be seen to fall within the definition of providing accounting services to the public, and therefore if members are associated with these activities, it can only be through a firm registered with CPA Ontario.

If you have any further questions about CPA Ontario’s Firm Registration Requirements, please contact the Registrar’s Office.