Table 6 has 9 items. Nearly all of the Tranche 2 conversation among accountants has circled around 3 of them: property, entity sales, and money moving through the trust account. You can read the full spread in our overview of the table 6 designated services.
Item 4 barely comes up. It should, because it catches work that plenty of firms file under ordinary advisory: lining up a business loan, putting a capital raise together, walking a founder through a seed round.
What item 4 says
Item 4 covers assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to a body corporate or a legal arrangement, in the course of carrying on a business.
The financing net is wide. AUSTRAC lists initial public offerings, venture capital, share purchase plans, rights issues and block trades on the equity side. On the debt side it lists secured and unsecured bonds, bills, notes, asset financing, debentures and loans, including government loans. No dollar threshold filters anything out.
The borrower’s structure is the switch
Read the item again and watch what it attaches to. The financing has to relate to a body corporate or a legal arrangement.
A sole trader borrowing to expand is neither of those things. Same client, same bank, same $400,000, and the work sits outside item 4. Incorporate that client on Monday, arrange the identical facility on Tuesday, and you are inside. Anyone weighing that structure choice for tax reasons should know it moves this line too, which is a wrinkle you will not find in sole trader versus company comparisons.
A partnership is a legal arrangement, so a partnership facility is caught. Borrowing by a trust is caught. A home loan for an individual sits outside item 4 at any size.
Figure 1. Item 4 tracks the legal form of the borrower rather than the size or purpose of the money.
Proposed entities count
Item 4 uses the word proposed twice, and it does real work. Financing that relates to a proposed body corporate or a proposed legal arrangement falls inside the item.
A seed round for a company with no ACN yet is caught. Put that next to item 6, which covers creating the company, and one startup engagement produces 2 designated services before the entity legally exists. We walked through the same doubling up in a different setting in setting up an SMSF, where the fund and its corporate trustee are separate item 6 services.
Two carve outs that are missing here
Accountants tend to import assumptions from the items they already know. Two of them fail on item 4.
Item 2, the sale of a body corporate, applies only where the transaction relates to a controlling interest. Item 4 carries no equivalent threshold. A rights issue that shifts 3 per cent of the register is still financing.
Items 1 and 2 both have an exception for transactions made pursuant to, or resulting from, a court or tribunal order. Item 4 has none. A recapitalisation carried out under a court order still runs through item 4.
Where the money has to land
The item carries one condition that quietly does a lot of sorting. The funds raised have to be able to be paid to the body corporate or legal arrangement, or held in trust on its behalf.
Follow the cash. New money going into the company is financing. A shareholder selling existing shares to an incoming investor sends the proceeds to the shareholder, and on our reading that falls outside item 4, though it may well be item 2 where the parcel is a controlling interest.
Same deal room, same advisers, same completion date. The direction the money travels changes which item you are sitting in.
When the obligation starts
AUSTRAC works this through with a business consultant. A founder asks about ways to fund a startup, the consultant explains equity and debt routes in general terms, and no transaction exists. That conversation sits outside item 4.
The founder then identifies likely investors and retains the consultant to lead the raise. The designated service begins when the consultant accepts those instructions and acts on them. Negotiating, structuring, executing the deal and drafting the finance documents all sit inside from that point.
The consultant then engages a credit rating agency. The agency stays outside, because a rating influences the transaction without directly advancing it.
Reading the boundary off real engagements
What you are doing | Where it sits |
Explaining debt and equity routes to a founder with no deal on foot | Outside. No transaction exists, and general advice influences without advancing. |
Retained to lead a raise once investors have been identified | Item 4, from the point you accept and act on instructions. |
Arranging a bank facility for a client company | Item 4. |
Arranging the same facility for a sole trader | Outside item 4. No body corporate and no legal arrangement. |
Seed funding for a company still to be registered | Item 4. Proposed entities are covered by the item. |
A shareholder selling existing shares to an incoming investor | Outside item 4 on our reading, since the funds go to the shareholder. Test it against item 2 for a controlling interest. |
Preparing tax analysis of a proposed debt structure | Outside while it stays advisory. Acting on instructions to put the structure in place changes the answer. |
Subscription money passing through your trust account | Item 3, on its own footing. |
That last row matters more than it looks, because item 3 has its own logic and its own exceptions. We pulled it apart in when holding client money triggers Tranche 2.
What this means for a scoping decision already made
Most firms mapped their designated services in the first half of 2026, and most of those maps were built off the property and entity sale items. If item 4 never surfaced in that exercise, the map is short a line, and the scoping paper behind an enrolment decision deserves a second read rather than a defence. Our walkthrough of AML obligations for accountants covers what enrolment then pulls in behind it.
A firm that arranges finance also inherits the ordinary consequences: initial customer due diligence before the service starts, ongoing monitoring, records for 7 years, and reporting duties that sit on top. Keeping the customer record for a proposed entity intact through incorporation is the fiddly part, and it is one of the reasons HP-KYC keeps the file open across the whole engagement rather than closing it at onboarding.
Technical reference (current as at July 2026)
- Designated service: item 4 of table 6, section 6(5B), Anti-Money Laundering and Counter-Terrorism Financing Act 2006. Assisting a person in organising, planning or executing a transaction, or otherwise acting for or on behalf of a person in a transaction, for equity or debt financing relating to a body corporate (or proposed body corporate) or a legal arrangement (or proposed legal arrangement), in the course of carrying on a business.
- Customer of the designated service: the person.
- Scope of financing: all capital and debt raising methods. Equity examples include initial public offerings, venture capital, share purchase plans, rights issues and block trades. Debt examples include secured and unsecured bonds, bills, notes, asset financing, debentures and loans, including government loans.
- Funds condition: the funds raised must be able to be paid to the body corporate or legal arrangement, or held in trust on its behalf.
- No controlling interest threshold applies to item 4. The controlling interest limitation applies to item 2.
- No court or tribunal order exception applies to item 4. That exception is confined to items 1 and 2.
- Commencement of the service: when you act on instructions in relation to the transaction. Preliminary and preparatory steps that directly advance the outcome are included. Advice or services that merely influence the outcome are not.
- Legal arrangement (section 5): an express trust, a partnership, a joint venture, an unincorporated association, or a similar arrangement including a foreign arrangement.
- Item 3 of table 6: receiving, holding, controlling (including disbursing) or managing a person’s money, accounts, securities, virtual assets or other property as part of assisting in a transaction, other than in a circumstance covered by section 6(5C).
- Obligations apply to table 6 designated services provided from 1 July 2026. Enrolment with AUSTRAC is required within 28 days of first providing a designated service, and by 29 July 2026 at the latest.
- Initial customer due diligence: sections 26F and 28, before the designated service is provided, subject to the delayed initial CDD provisions.
- Record keeping: 7 years after the end of the customer relationship (section 111). Penalty unit: $364 from 1 July 2026.
- Source: AUSTRAC, Professional services (Reform) guidance, page last updated 16 October 2025.
This article is general information and is not a substitute for advice on your own circumstances.
Frequently asked questions
Does helping a client get a loan trigger Tranche 2?
It can. Item 4 covers assisting with, or acting in, a transaction for equity or debt financing relating to a body corporate or a legal arrangement.
Is sole trader borrowing captured by item 4?
No. Item 4 attaches to financing that relates to a body corporate or a legal arrangement. A sole trader borrowing in their own name sits outside it.
Is there a minimum amount for item 4?
No. Item 4 carries no monetary threshold.
Does item 4 apply to a company that is not registered yet?
Yes. Proposed entities are inside item 4, so a seed round for a company yet to be registered can trigger it, and it can stack with item 6 in the same engagement.
