--- title: "Legal Arrangement Under AML/CTF Act s 5 | HeadStart Docs" description: "The statutory definition of 'legal arrangement' under AML/CTF Act s 5: trusts, partnerships, JVs, unincorporated associations and foreign equivalents." lang: en-AU json-ld: | [ { "@context": "https://schema.org", "@type": "Organization", "name": "HeadStart Docs", "legalName": "HeadStart Docs Pty Ltd", "url": "https://www.headstartdocs.com.au", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/logo-512.png?v=4", "width": 512, "height": 512 }, "description": "AML/CTF compliance digital products and programs for Australian businesses under Tranche 2 regulations. Free program documents and AML Portal. 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All reporting entities in designated sectors including lawyers, accountants, real estate agents, conveyancers, and trust and company service providers must have their AML/CTF programs in place by this date." } } ] }, { "@context": "https://schema.org", "@type": "Article", "name": "Legal Arrangement Under AML/CTF Act s 5 | HeadStart Docs", "description": "The statutory definition of 'legal arrangement' under AML/CTF Act s 5: trusts, partnerships, JVs, unincorporated associations and foreign equivalents.", "url": "https://www.headstartdocs.com.au/tranche-2-resources/legal-arrangement-definition", "publisher": { "@type": "Organization", "name": "HeadStart Docs" } }, { "@context": "https://schema.org", "@type": "Article", "headline": "What is a Legal Arrangement Under the AML/CTF Act?", "description": "Understanding the narrow statutory definition of 'legal arrangement' under s 5 of the AML/CTF Act.", "datePublished": "2025-01-28", "dateModified": "2025-01-28", "url": "https://www.headstartdocs.com.au/tranche-2-resources/legal-arrangement-definition", "image": "https://www.headstartdocs.com.au/images/headstart-og-image.png?v=4", "author": { "@type": "Organization", "name": "HeadStart Docs" }, "publisher": { "@type": "Organization", "name": "HeadStart Docs", "logo": { "@type": "ImageObject", "url": "https://www.headstartdocs.com.au/favicon.png" } } }, { "@context": "https://schema.org", "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://www.headstartdocs.com.au/" }, { "@type": "ListItem", "position": 2, "name": "Free Resources", "item": "https://www.headstartdocs.com.au/tranche-2-resources" }, { "@type": "ListItem", "position": 3, "name": "Legal Arrangement Definition", "item": "https://www.headstartdocs.com.au/tranche-2-resources/legal-arrangement-definition" } ] } ] --- [Get Started ](/checkout) We use cookies to enhance your experience and analyse traffic. [Privacy Policy](/privacy) Essential OnlyAccept All [Skip to main content](#main-content) [ ![HeadStart Docs](/assets/logo-dark-bg-CUivuKJ8.png)![HeadStart Docs](/assets/logo-light-bg-D5BRMGqf.png) ](/) [Home ](/) Features [Programs ](/programs) Resources Sectors [Log in ](/auth) [Portal](/aml-landing) [Back to Free Resources Dashboard](/tranche-2-resources) Statutory Definitions Section 5 # What is a "Legal Arrangement" Under the AML/CTF Act? The term "legal arrangement" appears throughout the Table 6 designated services (Items 2, 4, 6, 7, 8 and 9). Unlike the everyday use of "arrangement," this is a precisely defined statutory term under **section 5** of the AML/CTF Act. This article provides general information only. It is not legal advice. Always take advice specific to your circumstances. ## The Statutory Definition (s 5) Section 5 of the AML/CTF Act defines "legal arrangement" as meaning: - • An **express trust** (other than a testamentary trust) - • A **partnership** - • A **joint venture** - • An **unincorporated association** - • A similar legal arrangement that exists under the **law of a foreign country** ## What IS a Legal Arrangement ### Australian Structures - • Unit trusts - • Discretionary trusts (family trusts) - • Self-Managed Superannuation Funds (SMSFs) - • Fixed trusts - • Bare trusts - • General partnerships - • Limited partnerships (unincorporated) - • Joint ventures - • Unincorporated associations (clubs, societies) ### Foreign Equivalents - • **Fiducie** (France, Luxembourg) - • **Treuhand** (Germany, Austria, Switzerland) - • **Fideicomiso** (Latin America, Spain) - • **Waqf** (Islamic endowment) - • **Anstalt** (Liechtenstein) - • **Stiftung** (German foundation) - • Common law trusts from other jurisdictions - • Foreign partnerships and JVs ## What is NOT a Legal Arrangement The following are **not** "legal arrangements" under s 5 and therefore do not trigger the designated services that reference this term: - ✗ Service agreements - ✗ Royalty agreements - ✗ Licensing deals - ✗ Employment contracts - ✗ Commercial contracts generally - ✗ Testamentary trusts (expressly excluded) - ✗ Lease agreements - ✗ Loan agreements - ✗ Distribution agreements - ✗ General commercial "arrangements" ## Where "Legal Arrangement" Applies in Table 6 Item Designated Service How "Legal Arrangement" Applies Item 2 Transfer of company, business, trust etc Transferring beneficial ownership in a "body corporate or legal arrangement" Item 4 Equity/debt financing Raising capital for a "body corporate or legal arrangement" Item 6 Creation/restructure Creating or restructuring a "body corporate or legal arrangement" Item 7 Nominee director etc Acting as trustee, partner, or power of attorney of a "legal arrangement" Item 8 Nominee shareholder Acting as nominee for a "body corporate or legal arrangement" Item 9 Registered office Providing address for a "body corporate, legal arrangement or business" ## A Note on Drafting: "Arrangement" in Other Contexts The word "arrangement" appears in several places throughout the AML/CTF Act, which can create confusion. The narrow "legal arrangement" definition in section 5 should not be confused with: #### Section 37A - Reliance Arrangements This section allows reporting entities to rely on CDD performed by third parties under certain conditions. The "arrangement" here refers to the agreement between entities for CDD reliance - completely different from the structural "legal arrangement" in s 5. #### Other uses of "arrangement" The Act uses "arrangement" in various contexts to describe agreements, plans, or understandings between parties. These are not the same as the s 5 "legal arrangement" which specifically means trusts, partnerships, JVs and unincorporated associations. When you see "legal arrangement" in Table 6 designated services, it refers ONLY to the s 5 definition. A commercial "arrangement" or a s 37A "reliance arrangement" does NOT trigger these services. ### Key Takeaway When determining whether a designated service applies, remember that "legal arrangement" is a **narrow statutory term** limited to trusts, partnerships, JVs, unincorporated associations, and their foreign equivalents. It does not extend to general commercial agreements or contracts. This distinction matters for scoping your compliance obligations. A service involving a discretionary trust will trigger different designated services than one involving a simple service agreement. [View AML/CTF Program Documents](/programs) [ Read our complete Tranche 2 Guide Key dates, affected sectors, obligations and how to prepare ](/tranche-2) **Disclaimer:** This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services. We do not guarantee the accuracy of information provided. 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