When you’re in the middle of setting up a company, trust, or partnership, anti-money laundering compliance is probably the last thing on your mind. You’re focused on ASIC registrations, bank accounts, tax structures, and getting your new entity up and running. That’s completely understandable.

From 1 July 2026, Australia’s anti-money laundering and counter-terrorism financing obligations expanded to cover certain services provided by accountants, lawyers, conveyancers, real estate professionals and other professional service providers. If an accountant provides a regulated designated service while helping establish or restructure a company, trust or other legal arrangement, the accounting firm may need to complete customer due diligence before providing that service. The requirements apply to the service being provided, not automatically to every new entity established after 1 July 2026.

The good news: your obligations as a business owner are straightforward. You don’t need to become an AML expert. You simply need to understand what’s happening, why it matters, and what you’ll be asked to do.

Does This Apply to You?

These changes may affect you if an accountant or other newly regulated professional is helping you:

• • create or restructure a company or other body corporate;
  • create or restructure a trust or another legal arrangement;
  • arrange for someone to act as a director, trustee or in another specified position;
  • buy, sell or transfer a company, trust or other legal arrangement;
  • arrange equity or debt financing connected with a company or legal arrangement; or
  • provide a registered office or principal place of business address.
  • Whether the rules apply depends on the service being provided and whether the provider has the required geographical link to Australia. Simply registering an entity yourself does not automatically make you an AML/CTF reporting entity.

Remaining a sole trader does not automatically place you within the new AML/CTF regime. However, the rules may apply if your accountant provides another designated service covered by the legislation.

Existing clients are not automatically required to complete full initial customer due diligence simply because they already use an accounting firm. Transitional rules apply to pre-commencement customers, and the timing of any CDD depends on the nature of the existing relationship and whether a designated service is being provided.

These checks apply specifically when your accountant is helping you establish or manage a new entity structure. If you’re unsure whether your situation is covered, ask your accountant directly.

Why Anti-Money Laundering Compliance Is Expanding

Australia’s anti-money laundering rules have been around for years, but they’ve historically focused on banks and financial institutions. Accountants, lawyers, and other professional service providers were largely outside the formal compliance framework.

That’s changing. The federal government has expanded the Anti-Money Laundering and Counter-Terrorism Financing Act to include what are called “designated services” provided by accounting professionals. When an accountant helps a client establish a new entity, including registering a company with ASIC, managing a trust, or structuring a partnership, that engagement now triggers a formal obligation to verify the identities of the people involved.

The intent behind this expansion is consistent with what’s happening in comparable countries around the world. Professional services have been identified as a potential pathway for illicit funds to enter the legitimate economy. Extending verification requirements to accountants is part of closing that gap.

As a business owner, you don’t register with AUSTRAC or manage compliance yourself. Your obligation is simply to cooperate with your accountant’s verification process. The legal compliance burden sits with them. If you’d like to understand how Rhythm Financial’s accounting and business advisory services support clients through these obligations, our team is happy to walk you through it.

What “New Entity” Actually Means Here

In the context of anti-money laundering checks, a “new entity” refers to any new legal structure being established. The most common scenarios for small and medium business owners include:

• • Transitioning from sole trader to a company: You’ve been operating under your own name and are now incorporating, typically for liability protection, growth, or investor reasons.
  • Setting up a family or unit trust: Often used for asset protection, estate planning, or distributing income among family members.
  • Forming a partnership: Bringing in a business partner and creating a formal legal structure to govern the relationship.

Each of these scenarios involves the creation of a distinct legal entity with directors, trustees, or partners who must be verified under the new rules. If you’re considering any of these changes, our small business restructure service can help you navigate both the structural and compliance requirements.

Anti-Money Laundering Checks: What the Process Looks Like

The anti-money laundering checks your accountant will conduct are designed to be fast and low-friction. The screening is thorough by design. It exists to identify extreme risk indicators, not to scrutinise ordinary business owners. The vast majority of people going through this process clear every check without issue.

Here’s what to expect:

• • When verification is required, you’ll receive a text message with a secure link. You complete the process on your phone. The system verifies your identity by matching your photo ID to your face using a live image. It takes a matter of minutes.
  • Once complete, your accountant receives a verification report confirming the outcome. That’s it.
  • The background screening is broader than just a photo ID check. The system also checks whether you appear on any government or international registers as a known risk. This can include politically exposed persons lists, sanctions registers, or databases related to extremist activity. It is not a values assessment.

A politically exposed person, in this context, typically refers to someone who holds or has recently held a senior public position, such as a politician, judge, or senior government official, or is closely related to one. For most small business owners, this check returns a clean result immediately.

Critically, personal information collected during verification is not stored by your accountant beyond what is required for compliance purposes. The system is built with privacy in mind.

If there are any issues with the verification, such as an ID mismatch, an expired document, or an unexpected flag, your accountant will work through it with you. Most issues are administrative and are easily resolved.

If verification isn’t completed, your accountant may not be able to proceed with the engagement under the new rules. This could delay the establishment of your new entity, which is why getting ahead of it matters.

What the New AML Rules Mean for Your Next Business Move

From 1 July 2026, every new entity established with the help of an accountant will require this verification process as part of their due diligence before providing a regulated designated service connected with establishing or restructuring a company, trust or other legal arrangement. The requirement depends on the service and the firm’s circumstances; it is not an automatic rule for every new entity.

ASIC registration and AML verification are connected. When your accountant helps you register a company with ASIC or establish another entity structure, that engagement triggers the verification obligation. It’s not a separate step that happens weeks later. It’s part of the setup process. Our business advisory services include guidance on structuring your entity correctly from the outset, so you can meet both your commercial and compliance objectives.

There will also be a process to verify existing clients as the new requirements come into effect. If you’re already working with an accountant, you’ll likely be asked to complete verification before or around the 1 July 2026 date, or when your next relevant engagement begins. This isn’t a reflection of any concern about you. It’s a blanket requirement that applies to all clients as the new rules roll out. Your accountant will reach out when the time comes.

The practical reason to get ahead of this is straightforward. If you’re planning to restructure your business in the next year or two, understanding what’s required means no surprises when the time comes. The verification process is quick, but it does need to happen before your accountant can act on your behalf for designated services.

Planning a New Business Structure? Talk to Us First

If you’re currently operating as a sole trader and are thinking about transitioning to a company or trust structure, now is the right time to have that conversation with our team.

Frequently Asked Questions

Do I need to register with AUSTRAC as a business owner?

No. AUSTRAC registration and compliance obligations sit with your accountant, not with you. As a client, your responsibility is simply to cooperate with your accountant’s verification process when they ask you to complete it.

When exactly do the new rules take effect?

The expanded anti-money laundering compliance obligations take effect from 1 July 2026.

A new entity established through an accountant after this date may be subject to customer due diligence where the accountant is providing one or more regulated designated services.

What if I’m already a client of my accounting firm?

Even long-standing clients will need to complete the verification process. Your accountant will contact you when the time is right. You don’t need to initiate anything yourself.

Is my personal information kept private?

Yes. The verification process is designed with privacy in mind. Personal information is not stored beyond what is required under the compliance framework.

What happens if I don’t complete the verification?

If verification isn’t completed, your accountant won’t be able to proceed with the engagement for your new entity. This could delay the establishment of your company, trust, or partnership, which is why it’s worth completing it promptly when requested.

How long does the verification process take?

For most people, the process takes a matter of minutes. You’ll receive a text message with a secure link, complete the verification on your phone, and your accountant will receive the confirmation report shortly after.

Do anti-money laundering checks apply to every accounting service?

No. These checks apply specifically when your accountant is providing a designated service, such as helping you establish or manage a new entity structure. Not every accounting engagement triggers these requirements. If you’re unsure whether your situation is covered, ask your accountant.