Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)Chapter 3 - Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017
3.1 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
3.2 This Bill amends the Corporations Act 2001 to extend the crowd-sourced funding (CSF) regime to proprietary companies by:
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- expanding the eligibility for the CSF regime in section 738H to proprietary companies that meet eligibility requirements;
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- providing that proprietary companies with shareholders who acquire shares through a CSF offer are not subject to the takeovers rules;
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- adding special investor protection provisions for proprietary companies accessing the CSF regime; and
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- removing the temporary corporate governance concessions provided for in the Corporations Amendments (Crowd-sourced Funding) Act 2017 for public companies that access the CSF regime.
3.3 The special investor protection provisions that will apply to proprietary companies accessing the CSF regime include requirements to:
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- maintain a minimum of two directors;
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- prepare annual financial and directors' reports in accordance with accounting standards;
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- have their financial reports audited once they raise $3 million or more from CSF offers; and
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- comply with the existing related party transaction rules that apply to public companies.
Human rights implications
3.4 This Bill does not engage any of the applicable rights or freedoms.
Conclusion
3.5 This Bill is compatible with human rights as it does not raise any human rights issues.