Crowdfunding update – Equity Crowdfunding to be Extended to Pty Ltd Companies
Back in March we reported that the Australian Senate had passed Crowd Funding Legislation. That legislation which will come into force on 29 September 2017 was criticised for not enabling private companies to use the new regime. However at that time The Treasurer, Scott Morrison stated that work was already underway to enable Pty Ltd companies to equity crowdfund. Well Yesterday it was announced that Equity Crowd funding (or Crowd-sourced Equity Funding) would be extended to proprietary companies and that the Australian Securities and Investments Commission would be funded to the tune of $4.5M over 5 years to “implement and monitor” the changes. (more…)
Senate Passes Crowd Funding Legislation – Finally
Well Federal Parliament has finally passed Australia’s first equity crowdfunding legislation.
According to Federal Treasurer, Scott Morrison in his Treasurer’s Second Reading Speech for theCorporations Amendment (Crowd-Sourced Funding) Bill 2016 “The Bill forms part of the government’s commitment to help transition the Australian economy from the mining investment boom to a more diversified economy, with broader based growth, and long-term strength and resilience.”
The new legislation enables unlisted public companies with up to $25 million in annual turnover and less than $25 million in gross assets to raise up to $5 million via equity crowdfunding platforms over a 12 month period. Retail investors will be able to invest up to $10,000 per company in a 12-month period.
The ATO’s view of Crowdfunding and Tax
This article by Mark Pollock and Sherif Andrawes from our friends BDO and was first published here.
Crowdfunding is gaining huge popularity across the globe. In Australia interest in the various forms of crowdfunding is increasing rapidly. Soon we may catch up with the rest of world which means that our tax and corporate legislation will need to catch up too.
Crowdfunding Legislation
Expectations were high earlier this year as Australia appeared poised to enact legislation to improve the environment for equity sourced crowdfunding. However in the midst of election chaos the Bill lapsed at dissolution in the Senate. At the time there did appear to be broad support to move forward on equity sourced crowdfunding legislation. We should hear more on that later this year.
There has, however, been some progress in tax legislation. The ATO has recently released details on its current view on the tax implications of crowdfunding arrangements with the promise that as the industry expands and new developments arise, they will continue to review and update the information.
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