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On 20 June 2017, NOPSEMA issued, for public comment, draft guidance note GN1746 titled ‘Change to the titleholder with operational control of activities’ (GN).
Following the March introduction of the long awaited Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) (CSF Act), the Government has moved to extend the reach of its crowd-sourced equity funding (CSF) reforms to proprietary companies.
Currently, only public companies can access the new regulatory framework, due to commence in September 2017. In our previous update discussing the passage of legislation establishing a crowd-sourced equity funding regulatory framework, we noted the likely introduction of a bill extending the crowd-funding regime to proprietary companies.
As part of the Budget, an exposure draft of further proposed legislation, the Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 (Cth) (Bill), was released for consultation. The Bill effectively expands the application of the CSF Act to proprietary companies. The Bill imposes increased governance and reporting requirements for proprietary companies accessing the CSF scheme.
The Bill proposes to achieve the extension of the CSF regime via a strengthened eligibility criteria for proprietary companies wishing to access the CSF regime, including by introducing novel reporting requirements for participating companies and requiring participating companies comply with audit obligations where more than $1 million in funds is raised from CSF offers.
Consistent with the resulting increase in shareholder numbers, the Bill also proposes to subject CSF shareholders to Chapter 2E of the Corporations Act 2001 (Cth) (Corporations Act), being the related party transaction rules, and record the nature of the offer and accepting shareholders in the company register. The Bill provides that Chapter 6 of the Corporations Act, being the takeover provisions, will not apply to a company that has made an allowance in its constitution for CSF exit arrangements.
Key features of the Bill are:
The Bill is open for comment until 6 June 2017, with the Treasury inviting comment from all interested parties.