More designated activities and exclusions notified under PMLA for being regarded reporting entities.
The Ministry of Finance has notifies the following activities when carried out in the course of business on behalf of or for another person, as the case may be, as an designated activity under section 2(1)(sa) of the Prevention of Money-laundering Act, 2002.
(i) acting as a formation agent of companies and limited liability partnerships;
(ii) acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a firm or a similar position in relation to other companies and limited liability partnerships;
(iii) providing a registered office, business address or accommodation, correspondence or administrative address for a company or a limited liability partnership or a trust;
(iv) acting as (or arranging for another person to act as) a trustee of an express trust or performing the equivalent function for another type of trust; and
(v) acting as (or arranging for another person to act as) a nominee shareholder for another person.
However, the following activities shall not be regarded as designated activity :
(a) any activity that is carried out as part of any agreement of lease, sub-lease, tenancy or any other agreement or arrangement for the use of land or building or any space and the consideration is subjected to deduction of income-tax as defined under section 194-I of Income-tax Act, 1961 (43 of 1961); or
(b) any activity that is carried out by an employee on behalf of his employer in the course of or in relation to his employment; or
(c) any activity that is carried out by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of a company to the extent of filing a declaration to the effect that hat all the requirements of the Companies Act 2013 and the rules in respect of registration and matters precedent or incidental thereto have been complied with, as required under clause (b) of sub-section (1) of section 7 of Companies Act, 2013 or
(d) any activity of a person which falls within the meaning of an intermediary as defined in section 2 of the Prevention of Money-laundering Act, 2002.
Note: Under PMLA Act a reporting entity” means a banking company, financial institution, intermediary or a person carrying on a designated business or profession. The reporting entity is required to maintain prescribed records/documentations in respect of activities carried out by it on behalf of the client.
The Prevention of Money-Laundering (Maintenance of Records Rules), 2005 rules have been made for maintenance of records of the nature and value of transactions, carrying due diligence, the procedure and manner of maintaining and time for furnishing of information and verification of records of the identity of the clients of the reporting entities.
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