From 1 July, AML/CTF obligations for non-individual clients in Australia significantly change how firms onboard companies, trusts and partnerships. Instead of simply verifying an instructing person, firms must now identify who ultimately owns or controls the entity and apply due diligence at that level.

This shift moves onboarding from basic client intake to a structured Know Your Business (KYB) and Ultimate Beneficial Ownership (UBO) compliance process.

What is changing under AML/CTF for non-individual clients?

Under the updated AML/CTF framework, firms can no longer rely on traditional onboarding methods such as collecting basic company details or verifying a representative.

For non-individual clients, firms must:

identify and verify the legal entity (company, trust or partnership)
understand the ownership and control structure
identify Ultimate Beneficial Owners (UBOs)
apply AML/CTF checks to relevant individuals
maintain an auditable record of all onboarding decisions

This applies across all designated services where firms are required to comply with AML/CTF obligations.

What is KYB (Know Your Business)?

KYB, or Know Your Business, is the process of understanding the entity behind a transaction.

Unlike KYC (Know Your Client), which focuses on individuals, KYB requires firms to assess:

who owns the entity

who controls the entity

how the entity is structured

whether there are underlying beneficial owners

KYB is now a core requirement for AML/CTF onboarding of companies, trusts and partnerships.

What is a UBO (Ultimate Beneficial Owner)?

A UBO is the natural person who ultimately owns or controls a legal entity.

In most cases, this includes individuals who:

hold 25% or more ownership in a company

exercise effective control over an entity

act as trustees, beneficiaries or controlling partners depending on structure

Once identified, UBOs must undergo AML/CTF checks such as:

identity verification (VOI)

Politically Exposed Person (PEP) screening

sanctions screening

adverse media checks

Understanding UBOs is central to meeting AML/CTF compliance obligations.

AML/CTF onboarding challenges for firms

Many firms currently manage non-individual onboarding using manual or disconnected processes, including:

ASIC or entity searches completed separately

spreadsheets to track ownership structures

manual AML/CTF screening across multiple systems

inconsistent record-keeping across teams

This creates operational inefficiencies and makes it difficult to maintain a consistent audit trail.

The key challenge is not understanding AML/CTF requirements but applying them consistently at scale.

How AML/CTF onboarding workflows are evolving

Modern onboarding workflows are shifting towards integrated compliance processes that bring KYB, UBO identification and AML/CTF checks into a single system.

A structured workflow typically includes:

1. KYB information collection

Clients complete a structured KYB form capturing:

entity details (company, trust or partnership)

incorporation or registration information

ownership and control details

business activities and designated services

2. Entity and UBO verification

Firms conduct searches to:

verify the legal entity (e.g. ASIC records)

identify shareholders, directors or controlling parties

uncover Ultimate Beneficial Owners

Some platforms also support international UBO identification for overseas entities.

3. AML/CTF screening

Once individuals are identified, firms apply AML/CTF checks including:

identity verification (VOI)

PEP screening

sanctions and adverse media checks

These checks apply to both representatives and UBOs.

4. Risk assessment and onboarding decision

Each matter is assessed based on risk factors such as:

transaction type

ownership structure complexity

geographic risk

client behaviour or indicators

The outcome determines whether the matter is low, medium or high risk and whether escalation is required.

5. Audit-ready compliance record

At completion, firms generate a consolidated AML/CTF report that includes:

KYB information collected

entity and UBO search results

AML screening outcomes

risk assessment results

onboarding decision and rationale

This creates a complete audit trail for compliance and regulatory review.

When does AML/CTF onboarding need to be completed?

AML/CTF onboarding must be completed before or at the point a designated service is provided.

In practice, this means firms should ensure:

KYB information is collected early in the engagement

UBOs are identified before transactional work begins

AML/CTF checks are completed prior to matter progression

Key takeaway: KYB and UBOs are now central to onboarding

AML/CTF Tranche 2 reforms fundamentally change how firms onboard non-individual clients.

The focus is no longer just on verifying an instructing person, but on understanding the full ownership and control structure behind every entity.

For firms, this means:

adopting KYB as a standard onboarding process

consistently identifying and verifying UBOs

embedding AML/CTF checks into a structured workflow

maintaining clear, auditable compliance records

Firms that move early to standardise onboarding processes will be better positioned to manage compliance efficiently and at scale once obligations commence.

Simplify AML/CTF onboarding with InfoTrack

As AML/CTF obligations expand from 1 July, firms need onboarding processes that are both compliant and operationally efficient. Managing KYB, UBO identification, AML/CTF screening and audit records manually can quickly become complex, particularly when onboarding non-individual clients at scale.

InfoTrack helps firms streamline AML/CTF onboarding by bringing key compliance steps into a single workflow. Through InfoTrack’s all-inclusive Compliance Centre, firms can collect KYB information, verify entities, identify UBOs, complete AML/CTF checks including PEPs, sanctions and adverse media screening, and maintain a consolidated audit-ready compliance record.

By integrating onboarding and compliance into one process, firms can reduce duplication, improve consistency across teams and prepare for Tranche 2 obligations with greater confidence.

To learn more about how InfoTrack can support your AML/CTF onboarding workflows, visit our website.

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