Partnership Explained — At a Glance
- Meaning: A partnership is an association of persons, other than a company or limited partnership, carrying on business as partners or receiving income jointly, or it can be a limited partnership.
- Why it matters for Tranche 2: Many law firms, accounting firms, and advisory practices operate as partnerships, so your AML and CTF governance and accountability must be clear even when there is no “board”.
- Key legal reference: AUSTRAC links the meaning to the Income Tax Assessment Act 1997.
What Is a Partnership?
AUSTRAC describes a partnership as an association of persons, other than a company or limited partnership, carrying on business as partners or receiving income jointly, or a limited partnership, and notes it has the same meaning as in the Income Tax Assessment Act 1997.
Real-World Example of a Partnership
- A suburban accounting practice operated by three partners sharing profits.
- A legal practice structured as a partnership that provides conveyancing and trust account services.
- A buyer’s agency run by two partners as a joint business.
Best Practices for Tranche 2 Compliance
- Document who, in practice, acts as the governing body for AML and CTF decisions, even if governance is shared across partners.
- Make partner level approval rules explicit for higher risk customers, foreign PEP exposure, and unusual third party payments.
- Keep a consistent client file narrative across partners so the firm’s risk appetite is applied evenly.
Common Challenges
- Partners applying different onboarding standards based on commercial urgency.
- Inconsistent record keeping, especially where client ownership and beneficial ownership are complex.
- Ambiguity about who owns suspicion decisions and who signs off enhanced due diligence outcomes.
Final Insights on Partnership
Partnership firms can meet AUSTRAC expectations well, but only when decision making and accountability are made visible through documented roles, consistent procedures, and good quality files.
How Tranche 2 Consultants can help: We can design a partnership friendly governance model, partner approval framework, and firm wide onboarding templates that are practical and defensible.
“Bookmakers sit at a natural convergence point for cash, speed and anonymity. AUSTRAC’s focus reflects the reality that wagering platforms can be misused as value transfer mechanisms if risk controls are not actively applied.”
