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The rules behind a raise

A private company in Australia raises money under a handful of rules in the Corporations Act. These explainers say what each one requires, in plain words, with the section numbers and the sources so you can check them. They are general information, not legal advice.

• ExplainerThe s708 sophisticated investor certificate, explainedIf an investor's accountant signs a short certificate saying they are wealthy enough, a company can sell them shares without a prospectus, and they do not use up one of the 20 places in the small-scale limit. What the certificate says, who signs it, and how long it lasts.Read the explainer
• ExplainerThe 20 investors and $2 million rule (s708(1)), explainedA private company can sell shares to up to 20 people, for up to $2 million, in any 12 months without a prospectus. What counts toward those numbers, who is outside them, and the one rule about how you make the offer that trips people up.Read the explainer
• ExplainerSAFE vs convertible note in AustraliaBoth let an investor put money in now and get shares later, at a price the next round sets. One is a loan and the other is not. That one difference decides interest, deadlines, what happens if the next round never comes, and how each one is taxed.Read the explainer
• ExplainerHow to issue shares in a private company, step by stepThe paperwork after the money arrives: a directors' resolution, an entry on the register, a share certificate, and a notice to ASIC that is due 28 days later. What each step is, who does it, and what it costs to be late.Read the explainer
• ExplainerThe ESIC tax incentives, explainedIf a company is an early stage innovation company when it issues shares, its investors can claim back 20 per cent of what they paid as a tax offset and skip capital gains tax on the shares later. What the company has to be, what the investor has to be, and who has to do what.Read the explainer
• ExplainerEmployee share schemes in Australia: the rules since 2022, explainedGiving staff shares or options touches two sets of rules: the Corporations Act, which says how you can offer them without a prospectus, and the tax law, which says when the employee pays tax on the discount. What each requires of a private company, and where the start-up concession fits.Read the explainer
• ExplainerDo you need an AFS licence to help a company raise money?A company can sell its own shares without a licence. Almost anyone else who lines up investors for it as a business needs one, or needs to work under someone who has one, even when every investor is wholesale. Where the line sits, and what the exemptions do and do not cover.Read the explainer