The Australian Treasury has today, 4 August 2015, released a consultation paper providing the first details of the impending legislative framework for crowd-sourced equity funding (CSEF) for public companies. The introduction of a legislative framework for CSEF’s is part of the 2015-16 federal budget package.
The consultation paper outlines some of the key provisions that will apply to companies participating in CSEF’s, these include:
- the availability of CSEF is restricted to Australian public companies that qualify as small enterprises who are yet to raise funds through a previous public offer;
- a number of exemptions from certain public company compliance costs for newly registered or converted public companies;
- a maximum of five (5) million dollars in a twelve (12) month period can be raised through CSEF;
- a limit of one class of fully paid ordinary shares per round of CSEF with equal price, terms and conditions; and
- a tailored disclosure package that applies specifically to CSEF.
Further details will be forthcoming in the draft legislation to be released later in the year. Presently the Australian Treasury is inviting comments from interested stakeholders until 31 August 2015. It is anticipated that the legislation will be introduced to Parliament in the Spring sittings.
Further information
If you need advice on your rights and obligations in light of the proposed crowd funding laws, contact us for a confidential and obligation-free discussion:
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
Related insights about corporate law
-
ACCC guide on business use of social media
The Australian Competition and Consumer Commission has released a guide for businesses engaging with customers on social media, covering response times, substantiating claims and offering refunds. The guide takes into account the size of businesses and amount of followers when determining response times.
-
What exactly is a Corporate Governance Framework?
Businesses need to ensure their advertising and marketing materials comply with the Australian Consumer Law (ACL). Our experienced team can provide advice on structuring promotions, drafting terms and conditions, and obtaining permits for competitions and games of chance, helping businesses avoid costly penalties from the Australian Competition and Consumer Commission (ACCC).
-
Director’s duty to prevent insolvent trading
This article provides an overview of directors’ duty to prevent insolvent trading under the Corporations Act 2001 (Cth), including the test for solvency, indicators of potential insolvency, and potential defences.
-
Shifts in criminal liability for company officers
The Personal Liability for Corporate Fault Reform Act 2012 (Cth) was implemented to ensure personal criminal liability for corporate fault is imposed in line with corporate governance principles, reducing risk and compliance issues for Company Officers.
-
Corporate governance as a strategic advantage
Good corporate governance is essential for any successful business. Learn how Directors and Senior Management can make it a priority, and how it can provide value and security to the business in today’s competitive global economy.
-
Buy/sell agreements for business succession planning
Buy/Sell Agreements, also referred to as Put and Call Option agreements, provide certainty for a business on the death or disablement of an equity participant. This article explores the various ownership and taxation implications, including insurance trusts, cross ownership, individual ownership, SMSF ownership, group insurance policies, and transfer via will.
-
Appointing an alternate director explained
Appointing an Alternate Director? Understand the powers and responsibilities with our obligation free and confidential discussion. Learn more now.
-
Failure to review contracts can cost millions…
The case of The State of NSW v UXC Limited [2011] NSWCS 530 serves as a reminder of the need for organisations to pay close attention to contract details. An oversight can result in costly damages.
-
Is your business ready for investors?
Want to attract investors? This article reveals the essential steps to make your business “investor ready.” From crafting a solid business plan to securing legal certainty, learn how to prepare your business for successful investment and stand out to potential backers.
