Fit and Proper Test: Fit and Proper Test Failure: Individuals within a business
Registration will also send a letter to the business to advise them that their application to register as an MLR business cannot be accepted because an individual has failed the F and P test. The business can:
- do nothing. The consequences of this are that they can not undertake any MSB or TCSP activity.
- replace the individual(s) who has/have failed the F and P test with a fresh applicant; or
- remove the individual(s) to a position within the business where they are no longer required to take the F&P test i.e. they are no longer the nominated officer or in a position where they direct or control the business.
If the business decides to remove or replace the individual(s) who have failed the test, they must provide details in writing within 14 days. They must submit a F and P application form and pay a fee for each new applicant within 30 days of the date of the letter.
Where a replacement applicant is provided, the registration team will pass the information to RTT to include in their risk assessment process.
When a sole proprietor fails the F&P test this has different consequences for them as an individual and for their business:
- As an individual - they will not be able to undertake any role in any business, which requires them to pass the F and P test. However, if the reason for the failure is removed (e.g. bankruptcy is discharged or conviction is time spent) they may be able to re-apply for a fit and proper test.
- As a business - the business will not be able to register as an MSB or TCSP.