For accountants
Company and trust creation or restructuring: AML/CTF for accountants
Creating a body corporate or express trust can be a professional designated service. Under item 6, restructuring has a narrower meaning: changing the legal form of a body corporate or legal arrangement, including altering its legal structure through a merger or demerger. It does not capture a project merely because advisers call it a restructure. Accountants often combine structural, tax and implementation work, so the scope can change within one engagement. Comparing tax outcomes may only influence the client; preparing or executing documents that directly advance creation or a qualifying legal-form change can be captured. The firm should mark that transition and complete its AML/CTF controls before implementation.
See the accountants AML/CTF workspaceDistinguish structural advice from implementation
A paper comparing sole trader, company and trust outcomes is not automatically a creation service. Ask whether the work merely equips the client to decide or actively moves a chosen structure toward existence. Accepting formation instructions, drafting or reviewing a constitution, shareholder agreement or trust deed, preparing corporate-trustee documents, coordinating execution or lodging an ASIC application can be preparatory steps that directly advance creation.
Set separate engagement phases for advice and implementation. The scope record should identify the chosen structure, client instruction, intended roles, steps the firm will perform and table 6 item. A referral to a document provider or lawyer does not decide the firm's position if the accountant still plans, prepares, coordinates or executes active steps. Each provider assesses the service it actually supplies.
Analyse legal restructuring rather than accounting entries alone
For item 6, restructuring means changing the legal form of a body corporate or legal arrangement. AUSTRAC examples include changing a company limited by guarantee into one limited by shares, splitting one body corporate into multiple bodies corporate and merging multiple bodies corporate. A chart-of-accounts change, financial consolidation, staffing change, IT project, internal-governance change or operational reorganisation does not qualify without a change to legal form. A change in ownership, control, share capital, trustee or beneficiary is also not item 6 merely because it is commercially described as restructuring. Tie the conclusion to the instruments, filings and legal effect.
Common tax-driven projects can contain more than one service. A rollover may involve creating an acquisition vehicle, transferring an existing company or trust interest, qualifying equity or debt finance, managing transaction property or changing trustees and controllers. Small-business debt restructuring under the Corporations Act 2001 is not item 6, although item 4 can separately apply where its entity-financing conditions are met. Avoid labelling the entire job restructure. Classify each outcome under its own table 6 item and identify its customer and start point.
Map all customers identified for creation services
For creation of a company, the customer population includes the instructing person and the proposed directors and beneficial owners. For creation of an express trust, it includes the instructing person and proposed trustee, settlor and beneficiaries. This is wider than simply verifying the individual who emailed the firm or the entity that will pay the invoice.
Draw the proposed structure and roles at intake. Establish representatives and their authority, identify entities and natural persons, follow ownership and control, and collect the information applicable to each customer type. For a corporate trustee or layered ownership, show the chain clearly. For an SMSF, distinguish the fund, trustee, members, directors of any corporate trustee and the person giving instructions.
Complete CDD and risk approval before formation steps
Initial CDD is ordinarily completed before the designated service starts. Do not wait until after incorporation or deed execution. Verify required customer information using reliable and independent data, establish authority, understand the purpose of the structure, apply PEP and targeted-financial-sanctions checks, and assess customer, service, delivery-channel and geographic risk under the program.
Complexity alone is not wrongdoing, but unexplained layers, offshore controllers without a credible purpose, reluctant parties, inconsistent funding or proposed officeholders who do not understand their roles can elevate risk. Resolve inconsistencies, obtain source or purpose information where required, apply enhanced CDD when the threshold is met and use the firm's approval or refusal pathway before releasing documents or lodging applications.
Retain a complete structure and change record
Keep the engagement, instructions, service classification, proposed and final structure charts, formation or legal-form-restructure documents, registration evidence, customer and representative details, authority records, ownership and control analysis, verification, screening, risk assessment, approvals and enhanced checks. The file should show when advice ended, when the captured service began and that the required controls preceded it.
Later routine accounting for the structure is not automatically designated. Reassess if the firm implements another change of legal form, transfers the company or trust, arranges a nominee role, supplies a registered address, manages property for a transaction or advances qualifying entity finance. Changes in directors, trustees, beneficial owners or controllers do not become item 6 solely for that reason, but they remain important event-based triggers for CDD, risk and possible analysis under another service item.
Official sources
Use these primary AUSTRAC pages to confirm the current rules and apply them to your circumstances.
Frequently asked questions
Is every structure consultation a designated service?
No. General comparison or advice may only influence a decision. Once the firm accepts instructions and takes preparatory or execution steps that directly advance company or trust creation or an item 6 change to legal form, the implementation work may be designated.
What counts as restructuring under item 6?
It means changing the legal form of a body corporate or legal arrangement, including through a merger or demerger. Internal operational, staffing, IT, accounting or governance changes are outside item 6 without that legal-form change. Small-business debt restructuring is also outside item 6, although another designated service may apply.
Does setting up an SMSF involve a creation service?
An SMSF establishment ordinarily includes creating an express trust, so the formation steps require assessment under the table 6 creation service. Ongoing accounts, audit coordination or tax work for an existing SMSF is not designated solely because of the professional title.
Can the firm complete CDD after ASIC registration?
Initial CDD is ordinarily required before providing the designated service. Because preparatory and registration steps can themselves directly advance creation, the workflow should complete required CDD and approvals before those steps, not use registration as the trigger.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser. See our editorial and correction standards.