The 20/12 Rule and anti-avoidance provisions

Chapter 6D of the Corporations Act 2001 (Cth)(Act) contains what is widely referred to as the “fundraising provisions” which regulate how capital can be raised in Australia without issuing a formal disclosure document.

The general rule is that companies that raise more than A$2Million are required to issue a disclosure document.  In particular, an offer requires a disclosure document if the result is that securities are issued to more than 20 people in a 12 month period, and that more than $2 million is raised. This is known as the “20/12 rule”. [Read more…]

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