The Ministry of Finance has published a notification on May 9, 2023 (available here) specifying that the following activities carried out in the course of business, on behalf of or for another person, would be included in the definition of "person carrying on designated business or profession" and such person would have obligations of a "reporting entity" under the Prevention of Money Laundering Act, 2002 ("PMLA") which include verification of identity, maintenance of records, enhanced due diligence and providing information to the authorities under the PMLA:
- acting as a formation agent of companies and limited liability partnerships ("LLPs");
- acting as or arranging for another person to act as: (i) director or secretary of a company; (ii) partner of a firm; or (iii) similar position in relation to companies and LLPs;
- providing a registered office, business address or accommodation, correspondence or administrative address for a company, LLP or trust;
- acting 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
- acting or arranging for another person to act as a nominee shareholder for another person.
The following activities are excluded from the scope of the aforementioned activities:
- any activity that is carried out as part of any agreement of lease, sub-lease, tenancy or other such agreement for use of land/ building or any space, and the consideration is subjected to deduction in accordance with the provisions of the Income-tax Act, 1961;
- any activity undertaken by an employee on behalf of its employer in relation to its employment;
- any activity undertaken by an advocate, a chartered accountant, cost accountant or company secretary in practice, in respect of the formation of a company to the extent of filing a declaration under Section 7(1) of the Companies Act, 2013; or
- any activity of a person within the meaning of intermediary under the PMLA.
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