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.