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Go Fund Me Go – New crowd funding laws for businesses Posted on October 9, 2018
Read through to learn the main features of the legislation…
The main features of the legislation are:
- Private companies with less than $25 million in turnover or gross assets, that have their principal place of business and a majority of directors in Australia, are eligible to participate in the CSF regime.
- Eligible companies can raise up to $5 million in any 12-month period.
- Retail investors have an investment limit of $10,000 per company in any 12-month period.
- CSF offer can only be made via a licensed CSF Intermediary’s platform.
- Companies making CSF offer must prepare a CSF Offer Document that includes prescribed minimum information.
- For a private company to participate in the CSF regime, the proprietary company must have at least 2 directors and either one director (where there is only 2 directors) or a majority of directors must ordinarily reside in Australia.
- A proprietary company, which raises capital as a Crowd Sourced Funding Company, will have up to 3 groups of shareholders:
- Private company shareholders which are limited to 50 non-employee shareholders.
- There is no limit to the number of employee shareholders that the company can have.
- There is no limit to the number of CSF shareholders that the company can have.
- CSF company has to prepare annual reports and director reports.
- Proprietary companies, with more than $3 million in CSF capital, will need to be audited.
- CSF company has to notify ASIC when any CSF shares are issued.
The amendments to the Crowd Sourced Funding legislation present a great opportunity for small/medium enterprises to raise capital, without having to mortgage assets or borrow funds.
If you’d like to discuss this in relation to your business needs, please contact us.