New legislation to allow unlisted public companies to raise money through crowdfunding from mum and dad investors has passed through the lower house.
The bill faced heavy criticism from the opposition and will allow unlisted public companies with less than $5 million in assets and turnover to raise up to $5 million through crowdfunding each year.
A similar framework exists in the USA, UK and New Zealand but nothing of the like is available locally.
“The intent of this bill is to assist start-ups and other small businesses that may have difficulty accessing equity funding due to the costs of disclosure and other requirements, while protecting mum and dad investors,” minister for small business Kelly O’Dwyer said.
“The government crafted this bill after extensive stakeholder consultation and considering international models.”
Shadow minister for startups Ed Husic disagreed with O’Dwyer’s statement, citing concerns around red tape, particularly the need for startups to become an unlisted public company if they wished to rase funds through crowdfunding.
Husic said that the opposition would propose changes to the draft equity crowd-funding laws after he had reviewed the final report into the bill by the Senate Economics Committee which is due at the end of this month.
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