AML/CTF COMPLIANCE
AML/CTF Compliance — What This Means for You as Our Client
Effective 1 July 2026
What Is Changing and Why?
From 1 July 2026, anti-money laundering and counter-terrorism financing (AML/CTF) obligations apply to certain services provided by accountants, tax agents and other gatekeeper professionals. AUSTRAC These reforms — known as Tranche 2 — are designed to close gaps in Australia's financial crime framework and align with international standards.
As a registered tax agent and business advisory firm, we are now a reporting entity under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). This means we have legal obligations to verify who our clients are, assess risk, and report certain matters to AUSTRAC — Australia's financial intelligence regulator.
Our Obligations as a Reporting Entity
From 1 July 2026, we are required to:
1. Maintain an AML/CTF Program We must have an AML/CTF program in place before providing designated services to a client.
2. Conduct Customer Due Diligence (CDD) Before providing a designated service, we must establish the identity of our client, their representatives, any person on whose behalf they are receiving the service, and any beneficial owner of the client.
3. Conduct Ongoing Due Diligence Our obligations do not end at onboarding. We are required to monitor client relationships on an ongoing basis and update our records when circumstances change.
4. Report Suspicious Matters If we suspect a person is not who they claim to be, or we have information relevant to criminal activity, we must lodge a Suspicious Matter Report with AUSTRAC — within 24 hours if it relates to terrorism financing, or within 3 business days for other suspicions.
5. Keep Records We must maintain records for a minimum of 7 years.
Services We Provide That Are Covered by These Laws
The following services we offer are designated services under the AML/CTF Act, meaning AML/CTF obligations apply when we provide them:
● Formation of small private companies — registering and setting up proprietary limited companies with ASIC
● Formation of partnerships — assisting with establishing partnership structures
● Changes to business structures — including changes to shareholders, directors and other company details
● Special purpose financial statements — prepared in connection with the above business activities
Services We Do Not Provide
To be transparent with our clients, the following services fall outside the scope of what we offer and are not provided by our firm:
● Formation of trusts of any kind
● Holding, managing or handling assets on behalf of clients
● Providing a registered office address for clients
● Assist or perform Business Valuations and or Sales
Frequently Asked Questions
What This Means for You as a Client?
Before we can provide any designated service from 1 July 2026, we are required by law to collect certain information from you.
This applies to both new and existing clients.
Depending on the nature of the service, we may need to collect:
- Proof of your identity (e.g. driver's licence, passport)
- Details of the beneficial owners and controllers of any company or structure
- Information about the purpose of the engagement
- In some cases, evidence of your source of funds or source of wealth
You may be required to provide this information even if you have an existing relationship with our firm, such as where a new entity is involved or a new designated service is being provided.
What if a Client does not provide the required information?
We are unable to proceed
This is not a discretionary policy — it is a legal requirement. The provision of services may be delayed or withdrawn if you do not provide the information requested or respond in a timely manner. We appreciate your understanding and cooperation.
Are there Penalties for Non-Compliance?
We take these obligations seriously. If a reporting entity does not meet its obligations under AML/CTF law, AUSTRAC can apply significant penalties of up to $6,600,000 for individuals and $33,000,000 for a body corporate.
Questions about AML/CTF obligations?
If you have any questions about what information we need from you or why, please contact our office. We are happy to walk you through the process.
Note: This page provides general information about our compliance obligations. It does not constitute legal advice. If you require specific advice regarding AML/CTF obligations for your own business, please consult a qualified legal practitioner.
What is a Partnership?
A business structure that comprises two or more individuals is known as a partnership. In this type of structure, all the partners share the business's profits, losses, and decision-making. The Partnership Act 1891 governs partnerships and sets out the rules and obligations for the partners, including joint liability for all business debts.
Advantages
● Partnerships are a cost-effective alternative to establishing a company.
● They offer simplicity in administration, with profits and losses shared among partners.
● Collaboration within a partnership allows for the pooling of resources and diverse expertise.
● Compared to other business structures, partnerships provide enhanced privacy as they are not obligated to disclose financial information publicly.
Disadvantages
● Unlimited liability: Partners are personally liable for all business debts.
● Pass-through taxation: Business profits are taxed at the partners' individual tax rates, which can increase as earnings grow.
● Restricted transferability of ownership: Transferring ownership requires unanimous agreement from all partners.
● Potential for conflict: Disagreements among partners can disrupt business operations.
What is a Company?
In Australia, a company is a legal entity that is separate from its owners (shareholders) and directors. This structure allows the company to own assets, incur debts, enter into contracts, sue, and be sued. It also means that shareholders are generally only liable for the value of their shares if the company fails, while directors may be personally liable if they breach their legal duties. All companies in Australia must be registered under the Corporations Act 2001 and are regulated by the Australian Securities and Investments Commission (ASIC).
Advantages of a Company Structure
● Limited liability for shareholders: Generally, shareholders are only liable for the value of their shares.
● Separate legal entity: The company can enter into legal arrangements in its own name.
● Transferable ownership: Shares can be transferred to others.
● Lower tax rates: The tax rate for companies is generally lower than the highest individual tax rate.
Disadvantages of a Company Structure
● Increased regulation: Companies are subject to more regulations than other business structures.
● Less privacy: Some companies must disclose their financial information publicly.
● Higher costs and complexity: Companies are generally more complex and expensive to establish and operate than other business structures.
● Potential for personal guarantees: Directors or shareholders may be required to provide personal guarantees for company debts.
● Personal liability for directors: Directors can be held personally liable for company debts if they fail to meet their legal obligations.
● Double taxation: Company profits are taxed, and shareholders may also be taxed on dividends.
What is a Trust?
A trust business structure is a legal relationship where a trustee (individual or company) conducts business on behalf of beneficiaries.
Advantages
● Asset Protection and Limited Liability: Protects business assets and limits liability.
● Separation of Control and Ownership: Beneficial for protecting assets or income, especially for young people or families.
● Beneficiary Protection: Generally, beneficiaries are not liable for trust debts and pay tax on income at their individual marginal rates.
Disadvantages
● High Establishment Costs: More expensive to set up than sole traders or partnerships.
● Complexity: Requires professional advice due to intricate legal structures.
● Strict Trustee Obligations: Extensive regulations and obligations for the trustee.
● Profit and Loss Limitations: Losses cannot be offset by beneficiaries, and retaining profits for expansion may incur penalty tax rates.
