Posted: 16 July 2019
Is Crowd Sourced Funding Equity Raising the Same as Crowdfunding
Empowering SMEs (Issue 039)
Crowd Sourced Funding Equity Raising is not the same as “Crowdfunding”.
- Crowd Sourced Funding Equity Raising is governed by the Australian Government’s “Corporations Act” which specifies strict legal requirements for the company to abide by.
- The company has to appoint an Intermediary from the businesses which have been appointed Crowd Sourced Funding Intermediaries by ASIC.
- The company has to produce a Crowd Sourced Funding Offer Document (similar to a Prospectus) which contains significant amounts of information.
- “Crowdfunding” is a popular term given to people or organisations raising money for particular needs or events.
- “Crowdfunding” has virtually no government control or legislation covering its activities.
- Common uses for “Crowdfunding” include:
- raising money to assist a family with funeral expenses;
- raising money to assist someone who has been injured in an accident;
- raising money for an inventor who wants to raise a sum of money to finish a project. Sometimes the inventor offers the “crowd” sample products;
- an employee raising money to pay for legal expenses incurred in a dispute with an employer.
- There is no formal requirement on reporting the amount of money raised or the expenditure of that money within “Crowdfunding”.
- A company cannot utilise “Crowdfunding” to raise share capital for the company.
Click here if you wish to learn more about Crowd Sourced Funding Equity Raising or go to our website: www.esssmallbusiness.com.au/crowdsourcedfunding/learnmore
We have discounted our Crowd Sourced Funding Equity Raising Products by 40% for the month of July 2019, please click here to view our special.
If you have any questions, please send and email to peter@essbiztools.com.au or telephone Peter on 1800 232 088.
Peter Towers
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