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Crowd Sourced Funding Bill Passed by the Senate

On the 4th May 2016 the Australian Senate passed the Corporations Amendment (Crowd Sourced Funding) Bill 2015. The key attributes of Crowd Sourced Funding companies are they will be public companies with a maximum asset value of $5M and sales of under $5M. The maximum capital that can be raised in a twelve month period is $5M and the maximum amount that a retail investor (i.e. not a sophisticated investor) can invest is $10,000.

There is no limit to the amount of investment by a sophisticated investor. A sophisticated investor is defined as a person with net assets of at least $2.5M or income above $250,000.

A CSF (Crowd Sourced Funding) Offer document must be prepared for each capital raising.

Companies who wish to raise capital utilising the Crowd Sourced Funding legislation will need to prepare a range of documents including:

  • Business Plan
  • Market Research
  • Budgets
  • Cashflow Forecast
  • Intellectual Property Summaries
  • Statement of Share Price Calculation

and appoint directors (3) and a company secretary.

Each company needs to appoint an intermediator which will be a business which holds an Australian Financial Services Licence to act as the intermediatory.

ESS BIZTOOLS will be releasing a Crowd Sourced Funding Investment Ready Package shortly after the legislation receives the Royal Accent.

Email Peter@essbiztools.com.au for an update on the release of the Crowd Sourced Funding Package