{"id":291964,"date":"2023-05-12T18:00:09","date_gmt":"2023-05-12T12:30:09","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=291964"},"modified":"2023-05-12T16:50:03","modified_gmt":"2023-05-12T11:20:03","slug":"activities-included-in-definition-of-person-carrying-on-designated-business-or-profession-under-pmla-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/05\/12\/activities-included-in-definition-of-person-carrying-on-designated-business-or-profession-under-pmla-legal-news\/","title":{"rendered":"MoF widens ambit of “Person carrying on designated business or profession” under PMLA"},"content":{"rendered":"
\n

On 9-5-2023, the Ministry of Finance notified that the following activities when carried out in the course of business on behalf of or for another person, will be included in the definition of “person carrying on designated business or profession”<\/b> given under Section 2(1)(sa)(vi) and this person will have the obligations of a “reporting entity”<\/b> mentioned in Section 2(1)(wa)<\/a> of the Prevention of Money-Laundering Act, 2002<\/a>, (‘PMLA’) namely-<\/p>\n

1. acting as a formation agent of companies and Limited Liability Partnerships (‘LLP’);<\/p>\n

2. acting as or arranging for another person to act as<\/p>\n

• a director or secretary of a company<\/p>\n

• a partner of a firm<\/p>\n

• a similar position in relation to other companies and LLP;<\/p>\n

3. providing a registered office, business address or accommodation, correspondence or administrative address for a company or a LLP or a trust;<\/p>\n

4. 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;<\/p>\n

5. acting as or arranging for another person to act as a nominee shareholder for another person.<\/p>\n

Further, it was clarified that the following activities will be excluded from the scope:<\/p>\n

1. 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<\/a> of Income-tax Act, 1961<\/a><\/b>; or<\/p>\n

2. 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<\/p>\n

3. 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 as required under Section 7(1)(b)<\/a> of Companies Act, 2013<\/a><\/b>; or<\/p>\n

4. any activity of a person which falls within the meaning of an intermediary as defined in Section 2 (1) (n) of the PMLA<\/b>.<\/p>\n

Note:<\/b><\/p>\n

Section 2 (1) (wa)- “Reporting Entity”<\/b> means a banking company, financial institution, intermediary or a person carrying on a designated business or profession.<\/p>\n

Section 2 (1) (sa)- “person carrying on designated business or profession”<\/b> means,—<\/p>\n

(i<\/i>) a person carrying on activities for playing games of chance for case of kind, and includes such activities associated with casino;<\/p>\n

[(ii<\/i>) Inspector-General of Registration appointed under Section 3<\/a> of the Registration Act, 1908<\/a> (16 of 1908) as may be notified by the Central Government;]<\/p>\n

(iii<\/i>) real estate agent, as may be notified by the Central Government;<\/p>\n

(iv<\/i>) dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government;<\/p>\n

(v<\/i>) person engaged in safekeeping and administration of cash and liquid securities on behalf of other persons, as may be notified by the Central Government; or<\/p>\n

(vi<\/i>) person carrying on such other activities as the Central Government may, by notification, so designate, from time to time;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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