Corporations Act 2001



Division 5 - Procedure for offering securities  


The following table summarises what a person who wants to offer securities must do to make an offer of securities that needs disclosure to investors under this Part and gives signposts to relevant sections:

Offering securities (disclosure documents and procedure)
Action required Sections Comments and related sections
1 Prepare disclosure document, making sure that it: 710
Section 728 prohibits offering securities under a disclosure document that is materially deficient.
· sets out all the information required Section 729 deals with the liability for breaches of this prohibition.
· does not contain any misleading or deceptive statements Sections 731 , 732 and 733 set out defences.
· is dated
and that the directors consent to the disclosure document.
2 Lodge the disclosure document with ASIC 718 Subsection 727(3) prohibits processing applications for non-quoted securities for 7 days after the disclosure document is lodged.
3 Offer the securities, making sure that the offer and any application form is either included in or accompanies: 721 Sections 727 and 728 make it an offence to:
· offer securities without a disclosure document
· the disclosure document; or · offer securities if the disclosure document is materially deficient.
· a profile statement if ASIC has approved the use of a profile statement for offers of that kind. Subsection 729(3) deals with liability on the prospectus if a profile statement is used.
The securities hawking provisions (section 736 ) restrict the way in which the securities can be offered.
4 If it is found that the disclosure document lodged was deficient or a significant new matter arises, either: 719
Section 728 prohibits making offers after becoming aware of a material deficiency in the disclosure document or a significant new matter.
· lodge a supplementary or replacement document under section 719 or 719A ; or Section 730 requires people liable on the disclosure document to inform the person making the offer about material deficiencies and new matters.
· return money to applicants under section 724 .
5 Hold application money received on trust until the securities are issued or transferred or the money returned. 722 Investors may have a right to have their money returned if certain events occur (see sections 724 , 737 and 738 ).
6 Issue or transfer the securities, making sure that: 723 Section 721 says which disclosure document must be distributed with the application form.
· the investor used an application form distributed with the disclosure document; and Section 729 identifies the people who may be liable if:
· the disclosure document is current and not materially deficient; and · securities are issued in response to an improper application form; or
· any minimum subscription condition has been satisfied. · the disclosure document is not current or is materially deficient.
Sections 731 , 732 and 733 provide defences for the contraventions.
Section 737 provides remedies for an investor.


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