Engagement Letter Template for India

An Engagement Letter outlines the professional relationship between a service provider and their client in India. It's a formal document that clearly spells out what services will be provided, how much they'll cost, and when they'll be delivered - much like a detailed roadmap for the working relationship.

Commonly used by lawyers, accountants, and consultants, these letters protect both parties by preventing future disputes. Indian courts recognize them as legally binding agreements, and professional bodies like ICAI require them for accounting services. The letter typically includes payment terms, confidentiality clauses, and specific deliverables, making expectations crystal clear from day one.

Use an Engagement Letter at the start of any professional service arrangement in India. This is especially crucial when hiring lawyers, accountants, consultants, or other experts where the scope of work needs clear definition. Smart businesses send these letters before starting major projects, complex advisory work, or long-term professional relationships.

The timing matters - send it right after initial discussions but before work begins. Indian regulators like SEBI and ICAI expect to see these letters in place for financial and advisory services. They're particularly important for high-value contracts, when dealing with sensitive information, or in situations where multiple stakeholders are involved in the project.

• Internal Audit Engagement Letter: Specialized for internal audit functions, detailing scope of review, access rights, and reporting requirements
• Engagement Letter For Tax Audit: Focused on tax compliance reviews, with specific references to Income Tax Act requirements and filing deadlines
• Engagement Letter For Accounting Services: Covers bookkeeping, financial statement preparation, and routine accounting support
• Business Engagement Letter: General-purpose format for business consulting and advisory services
• Audit Acceptance Letter: Confirms acceptance of statutory audit appointment, outlining regulatory compliance responsibilities

• Professional Service Providers: Chartered accountants, lawyers, consultants, and auditors who draft Engagement Letters to define their service scope and terms
• Corporate Clients: Companies and businesses receiving professional services, who review and agree to the terms outlined
• Legal Teams: In-house counsel or external lawyers who review and negotiate engagement terms for compliance with Indian laws
• Company Directors: Authorized signatories who formally accept the engagement on behalf of their organizations
• Regulatory Bodies: ICAI, SEBI, and other authorities who set standards for professional engagements and may review these letters during audits

• Service Details: Define exact scope of work, timelines, deliverables, and any specific exclusions
• Client Information: Gather complete business details, registration numbers, and authorized signatory names
• Fee Structure: Document all charges, payment terms, billing cycles, and any additional cost conditions
• Professional Credentials: Include relevant registration numbers, certifications, and professional memberships
• Compliance Requirements: Check specific ICAI or industry regulatory guidelines that apply to your service
• Document Generation: Use our platform to create a legally-sound Engagement Letter template tailored to Indian requirements
• Review Process: Establish internal approval workflow and signature requirements before sending to client

• Parties and Details: Full legal names, addresses, and registration numbers of service provider and client
• Scope Definition: Detailed description of services, deliverables, and any specific exclusions
• Fee Structure: Clear breakdown of charges, payment terms, and billing schedules as per Indian accounting standards
• Duration Clause: Engagement period, renewal terms, and termination conditions
• Confidentiality Terms: Data protection obligations aligned with Indian IT Act requirements
• Limitation of Liability: Clear boundaries of professional responsibility and indemnification terms
• Governing Law: Explicit mention of Indian jurisdiction and applicable state laws
• Authentication: Signature blocks for authorized representatives with company stamps

While both documents establish professional relationships, an Engagement Letter differs significantly from an Engagement Agreement in several key aspects. Let's explore these important distinctions:

• Format and Formality: Engagement Letters are typically more concise and letter-styled, while Engagement Agreements are more detailed contract documents with formal clause structures
• Legal Weight: Both are legally binding in India, but Agreements generally contain more comprehensive terms and are preferred for complex, high-value services
• Scope Definition: Letters focus on specific professional services with clear start/end points, while Agreements often cover broader, ongoing relationships
• Industry Usage: Letters are standard in accounting and audit services (as per ICAI guidelines), while Agreements are more common in consulting and business partnerships
• Modification Process: Letters can be more easily updated with addendums, while Agreements typically require formal amendments with fresh signatures