Fund Raising Exemptions

To assist in future fund-raising for the Company, I offer the following “non legal” guidance on the principal Corporations Act exemptions from requiring a prospectus.

Chapter 6D of the Act covers fund-raising (new issues and transfers) by any company within Australia (i.e., including that undertaken by foreign companies). In most cases, other than the following, a prospectus (or other disclosure document) must be lodged with ASIC before offering shares for sale – sec706.

The main exemptions are set out in Section 708 of the Act, in summary as follows

Note:

  • that these classes of exemptions are mutually exclusive, so funds could be raised from each type concurrently – sec. 708(5)(a)
  • any share applications resulting from offers made and received outside Australia are exempted from the Chapter 6D fundraising provisions and therefore are not encompassed in any of these categories – sec.708(5)(b)
  • also that certain restrictions may apply to some of the above on-selling their shares within 12 months
  • obviously, it could be in Directors’ best interests to obtain formal legal advice if these guidance notes are to be relied on.

*Originally written by Company Secretary, an Australian virtual company secretary service.

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