It was good to see the release of draft equity crowd-sourced
funding (CSF) legislation for proprietary
companies, as part of the 2017-18 Federal Budget package (on 11
May) – with the Government responding to a number of
criticisms from various stakeholders (including Labor), following
the finalisation of the CSF regime for public companies. These new
laws will be welcome to many, with proprietary companies
representing over 99% of companies in the Australian market.
The new laws will remove the need for proprietary companies to
transition to public companies. Instead, investors will be
protected by additional obligations, which are currently proposed
to include a requirement to have a minimum of two directors,
complete financial reporting in accordance with accounting
standards (including audit requirements where more than $1 million
is raised), and restrictions on related party transactions. In
return, the prospectus disclosure requirements for CSF offers will
be
