Stacks can help your business to understand its regulatory obligations when selling shares, including the complex disclosure documentation requirements.
Raising capital in order to grow your business is a common goal. Selling shares is one way to generate investment in your company.
Under the provisions of the Corporations Act 2001 (the Act) and associated regulations, the Australian Securities and Investments Commission (ASIC) regulates the way businesses may raise capital in Australia. The laws are complex and it is important that you seek legal advice to ensure that you meet your legal obligations when selling shares.
In order to issue shares for sale to the public, you must prepare and issue a disclosure document (unless you meet the criteria for exemption under the Act.)
Stacks Law Firm has specialist commercial lawyers who will ensure that you understand your legal obligations when raising money. We will be your business partner to make sure that you have the right structures in place to grow your business without falling foul of the law.
What are disclosure documents?
Disclosure documents are regulated fundraising documents that must be lodged with ASIC when issuing securities for sale to the public. There are four types of disclosure documents:
- Prospectus - This is a document that invites parties to subscribe for and acquire shares in your company. Any company can use this type of disclosure document to fundraise. It must include all relevant information about the company to assist would-be investors in their decision to buy shares. There are very specific steps involved in preparing and issuing a prospectus, provided in the Act.
- Offer Information Statement (OIS) - This is basically a summarised prospectus and can only be used for fundraising up to 10 million dollars, which includes any amount raised under an earlier OIS. The disclosure requirements involved in an OIS are less than for a prospectus.
- Profile statement - this is a short statement that lets people know of an offer, and sets out key information about the company and the offer. Companies can only use profile statements if ASIC has provided approval to do so.
Two-part simple corporate bonds prospectuses - This is a specific type of disclosure applying to offers of ‘simple corporate bonds.’ This must include:
- A base prospectus with general information that is not likely to change over the 3 year life of the document
- An offer-specific prospectus for each offer, containing details of the offer and any updated information from the base prospectus