Tax Laws Amendment (2007 Measures No. 2) Act 2007 (78 of 2007)

Schedule 8   Venture capital

Part 2   Early stage venture capital limited partnerships

Venture Capital Act 2002

184   At the end of Division 13

Add:

13-15 An ESVCLP’s approved investment plan

(1) A notice under subsection 13-1(3) to the effect that the *Venture Capital Registration Board has decided to register a partnership as an *ESVCLP must specify a document that sets out the investment plan in relation to which the Venture Capital Registration Board is satisfied as mentioned in paragraph 13-1(1A)(c).

(2) An *ESVCLP’s approved investment plan is:

(a) the investment plan set out in the document that the notice under subsection 13-1(3) specifies; or

(b) if that plan has been replaced under this section, that plan as so replaced.

(3) A *general partner of an *ESVCLP may, by writing, request the *Venture Capital Registration Board to approve a new plan as a replacement for the ESVCLP’s *approved investment plan.

(4) The request must state why the *ESVCLP wants the replacement plan.

(5) If the *Venture Capital Registration Board is satisfied that the replacement plan is appropriate, it must grant the request and approve the replacement plan.

Note: Section 13-20 deals with deciding whether a replacement plan is appropriate.

(6) If the *Venture Capital Registration Board approves the replacement plan, the ESVCLP’s *approved investment plan is replaced accordingly on the giving of the approval.

(7) If the *Venture Capital Registration Board is not satisfied as mentioned in subsection (5), the Board must refuse the request.

(8) The *Venture Capital Registration Board must give the *general partner who made the request written notice of its decision on the request as soon as practicable after the decision is made.

(9) If the *Venture Capital Registration Board’s decision is to refuse the request, the notice must also include a statement of its reasons for its decision.

(10) A failure to comply with subsection (8) or (9) does not affect the validity of the decision.

13-20 Deciding whether investment plans are appropriate

(1) In deciding, for the purposes of paragraph 13-1(1A)(c) or subsection 13-15(5), whether it is satisfied that a partnership’s investment plan, or a replacement for a partnership’s *approved investment plan, is appropriate, the *Venture Capital Registration Board must take into account the extent to which the partnership focuses on early stage venture capital, having regard to:

(a) the stages of development of the entities in which the partnership proposes to invest; and

(b) the levels of cash flow of those entities; and

(c) the levels of technology of those entities; and

(d) the proportions of intellectual property to total assets of those entities; and

(e) the levels of risk and return of those entities; and

(f) the amount of tangible assets and collateral of those entities against which borrowings may be secured; and

(g) the requirements of this Act relating to an *ESVCLP making and holding investments; and

(h) whether the partnership’s *committed capital can only be used in relation to early stage venture capital, and whether it can be transferred to other entities; and

(i) whether the investment plan is connected with other plans for investment that, if combined with the investment plan, would lead to the partnership exceeding the limit on *committed capital under subparagraph 9-3(1)(d)(ii); and

(j) any additional matters specified in guidelines made under subsection (2).

(2) The *Venture Capital Registration Board may, by legislative instrument, make guidelines specifying additional matters that it must take into account in deciding, for the purposes of paragraph 13-1(1A)(c) or subsection 13-15(5), whether it is satisfied that:

(a) a partnership’s investment plan is appropriate; or

(b) a replacement for a partnership’s *approved investment plan is appropriate;

as the case requires.

(3) This section does not limit the matters that the *Venture Capital Registration Board may take into account in deciding, for the purposes of paragraph 13-1(1A)(c) or subsection 13-15(5), whether it is satisfied that:

(a) a partnership’s investment plan is appropriate; or

(b) a replacement for a partnership’s *approved investment plan is appropriate;

as the case requires.