A path for inclusion of different corporate structures into the new CSF regime appears to have been set. On 1 March 2016, the Senate Economics Legislation Committee released their report into the Corporations Amendment (Crowd-sourced funding) Bill 2015 (‘the Bill’). We covered the Bill’s passage through the House of Representatives (see previous articles on our website) because we saw CSF as an exciting opportunity for innovation. From our perspective, an unfortunate downside of the Bill was the requirement that the only corporate structure eligible to take advantage of the CSF was an unlisted public company (again see previous articles for why this was the case). From the submissions made to the Committee, it appears that many other people also thought that this was a downside.
The report by the Senate Committee addressed this issue and a range of others. It noted the numbers of submissions seeking both more conservative and liberal approaches to the Bill but commended the Australian Government for the depth of consultation and the overall approach taken. It made two recommendations, the first being that the government undertake a review of the legislation in two years with special attention to matters included in the report (an example being corporate structures that can utilise CSF); and second, that the Senate pass the Bill.
While the report included a dissenting report from Labor Senators, they indicated that they would not stop the Bill from passing the Senate. Encouragingly, they suggested that CSF should not be limited to unlisted public companies and agreed that a review of the Bill should occur two years after Royal Assent.
While the findings of the report are not ideal for anyone who doesn’t want to start an unlisted public company, the recommendation of a review two years after enactment should be seen as a positive outcome and as CSF becomes more mainstream in Australia, considerations of other corporate structures will inevitably occur. Pending the anticipated passing of the Bill, we will be following how successful the resulting act is with great interest.
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