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In summary, who can access the CSF regime in Australia? Any of the below:
- Private Companies/ Pty Limited Companies (This is the most common)
- Public unlisted companies
Companies that are unable to access the CSF regime in Australia:
- A non-Australian company (even an international company looking to build an outlet in Australia)
- Publicly listed companies on any stock exchange
Below is a snapshot of further requirements that companies must meet to be eligible for a crowd-sourced funding offer (CSF) within Australia.
Private Company / Pty Limited Companies (Most common)
Since Oct '18, Proprietary companies will be able to access Equity Crowdfunding. Below, we've summarised the legislation changes that have made crowdfunding available for Private / Pty Limited companies..
- CSEF investors don’t count towards the 50 investor Pty Ltd limit
- Additional requirement to have 2 Directors
- The company becomes subject to related party transaction rules.
- Raising accumulative $3m requires extra governance - incl. auditing. (similar to Public Limited companies)
- A company must keep a register of all CSEF investors.
What companies may need to convert?
We have come to learn that companies in particular industries may have to convert to a Public Limited company to ensure they make Equity Crowdfunding workable under local state legislation and regulations. For example: under particular state liquor laws, shareholders in a proprietary company may be deemed to hold a position of authority in relation to a licensee.
Conversion process time: 5-6 weeks
See below a guide on the conversion process. We recommend that you get started on this process prior to launching an Expressions of Interest campaign (see later). Note: the public conversion is not a pre-requisite to running an EOI campaign - however the company must intend converting to access this service.