The Australian government is following suit on its foreign counterparts and has been liaising with industry participants in order to develop a legislative framework to facilitate crowd-sourced equity funding (“CSEF”). Other jurisdictions that are already implementing or in the process of implementing CSEF legislative framework (or a similar framework) are Canada, US, New Zealand, Italy and Malaysia. The latest instalment in Australia was the release of a consultation paper seeking feedback on, inter-alia, whether the CSEF framework should be extended to proprietary companies. In addition, the consultation paper considers various provisions of the Australian corporation law, which may require amendments to allow small proprietary companies to undertake capital raising without having unnecessary legal impediments. Some of the specific areas considered are:
- the requirement to make an annual solvency resolution;
- the requirement to maintain a share register;
- ways to facilitate the execution of documents; and
- completing and lodging forms with the regulator.
This consultation paper also outlines the key elements of the Government’s CSEF framework for public companies and is reproduced in the table below.
Facilitating crowd-sourced equity funding and reducing compliance costs for small business, pg 4