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What is restructuring?

Writer's picture: Scott PascoeScott Pascoe

An odd question from someone with restructuring in their firm name, however the AML laws will apply to a person “assisting to plan or execute, or otherwise acting on behalf of a person in, the creation or restructuring of a company”.


There is unhelpfully no definition of restructuring in the Amendment Bill or the AML Act 2006. Restructuring means many things to many people, which might be easily identified in some cases (like a DOCA or SBRP), other times are not so clear. What about some business improvement advice, reducing footprint or headcount? Without a definition, almost any advisor could be captured by the Act and subject to AML compliance.


Below are some of the common definitions from a quick Google. How is a service provider to judge whether the Act applies to them? This should have been fixed before it became law. I think ‘restructuring’ should be removed and replaced with ‘change of control’.


An Exposure Draft of AML Rules was released in December. There is no sign of a definition in there either.


Dictionary.com: a change in the business strategy of an organization resulting in diversification, closing parts of the business, etc, to increase its long-term profitability


Investopedia: A business can restructure in many different ways. The different types of restructuring include legal restructuring, turnaround restructuring, cost restructuring, divestment, spin-off, repositioning restructuring, and mergers and acquisitions.


Wikipedia: reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring.

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