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Extending Crowd-sourced Equity Funding (CSEF) to proprietary companies

9 May 2017 | Draft Legislation

The Government has released for public consultation draft legislation and associated explanatory materials to extend Crowd-sourced Equity Funding (CSEF) to proprietary companies. These changes are being progressed as part of the 2017-2018 Budget.

CSEF is an innovative type of fundraising that allows a large number of individuals to make small financial investments in exchange for an equity stake in the company. The Government has already passed legislation that will establish a CSEF regime for public companies, commencing 29 September 2017.

The draft legislation will amend the Corporations Act 2001 to extend the CSEF regime to proprietary companies, improving access to finance for start ups and innovative small businesses. These amendments remove the need for proprietary companies to transition to the public company type, reducing cost and compliance burdens. Investors will be protected by additional obligations that CSEF proprietary companies will be required to uphold. These obligations include: a minimum of two directors; financial reporting in accordance with accounting standards; audit requirements; restrictions on related party transactions; and minimum shareholder rights to participate in exit events.

All interested parties are invited to make a submission by Tuesday 6 June 2017. More information on the Government’s CSEF regime for public companies is available at

Making a Submission

Interested parties are invited to comment on the consultation papers.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

Closing date for submissions: Tuesday, 6 June 2017

Address written submissions to:

Financial Innovation and Payments Unit
Financial System
The Treasury
Langton Crescent

For enquiries please call Laura Llewellyn on (02) 6263 3681.

Key Documents

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