The s708 sophisticated investor certificate, explained

When a company sells shares, the law's default is that it has to hand the buyer a disclosure document first. For a private company (a Pty Ltd) that is not even an option: it is not allowed to make offers that need one. So a private company can only sell shares to people the law lets it sell to without a document. Section 708 of the Corporations Act is that list. One entry on it is the sophisticated investor, and the usual way to show someone is one is a certificate from their accountant (s708(8)(c)).

Once an investor has a certificate, you can offer them shares with no disclosure document. And they stop counting toward the 20-investor and $2 million limit that applies to everyone else (s708(5)). A raise made up entirely of certified investors has no ceiling from s708 at all, which is why most larger private raises are built on them.

You will also hear the phrase wholesale client. It is the same test under a different name. Sophisticated investor is the term for buying shares (Chapter 6D of the Act). Wholesale client is the term financial advisers use for products and advice (Chapter 7, s761G(7)). One certificate covers both if it cites both sections, and most accountants' forms do.

The investor only has to pass one of them.

• Net assets of at least $2.5 million. Net means what they own minus what they owe. The family home counts.
• Gross income of at least $250,000 in each of the last two financial years. Gross means before tax. Each year has to clear the bar on its own: $400,000 one year and $100,000 the next does not pass.
• The figures can include a company or trust the investor controls (s708(9B) and (9C)), so someone whose wealth sits in a family trust still passes.
• A company or trust the investor controls can be the one that buys the shares (s708(8)(d)). The certificate names the person and the entity signs the subscription.

The $2.5 million and $250,000 are set by regulation 6D.2.03 and have not moved since 2001. They are not indexed to inflation, which is why more people pass every year and why Parliament keeps looking at them. A parliamentary committee reviewed the tests and reported in February 2025; it recommended a regular review and clearer criteria rather than new figures. The government's response in March 2026 noted the recommendations and said it was consulting on targeted reforms during 2026. Nothing has changed in the law as at the date on this page.

A qualified accountant. The Act defines that as a member of an accounting body ASIC has approved (s88B). In practice that means CPAs (entitled to use CPA or FCPA), chartered accountants (CA or FCA) and members of the Institute of Public Accountants (AIPA, MIPA or FIPA), provided they keep up their body's professional education. Members of six overseas accounting bodies can certify a resident of their own country. The list is in ASIC's Qualified Accountant Instrument 2016/786, which expires on 1 October 2026; ASIC has said it will remake it for ten years with no change.

It is the investor's accountant, working from the investor's own figures. The company raising money cannot certify its own investors, and a director signing a statutory declaration does not count. Most accountants have a standard form, and ASIC publishes a sample.

Two years from the date on it. More people get this wrong than anything else on this page, so here is the whole story. If you read s708(8)(c) on its own, it says the certificate must be no more than six months old. But a regulation made in 2005 (reg 6D.5.02) says to read that as two years, and a matching regulation (reg 7.6.02AF) does the same for the wholesale client rule. ASIC's own guidance says certificates are valid for two years. A bank form that still says six months is quoting the Act without the regulation.

The two years runs to the day each offer is made, not to the day the raise started. A certificate dated 1 March 2025 covers an offer made on 28 February 2027. It does not cover one made on 2 March 2027, even if the raise opened in January.

One certificate works for any company. It belongs to the investor, so they can use it on every raise they look at for two years. On Struck it sits on the investor's profile, is checked whenever a raise wants to send them an offer, and the investor is asked for a new one thirty days before it runs out. Struck counts the two years as 24 calendar months, so a certificate dated 29 February lapses on 28 February two years later. The guide on qualifying investors under s708 shows where this happens.

None of these needs a certificate.

• Invest $500,000 or more. If the investor pays at least $500,000 for the shares, that is enough on its own (s708(8)(a)). Money they already paid for shares of the same class counts toward the $500,000 (s708(8)(b)). The catch: the company cannot lend them the money (s708(9)).
• Go through a licensed adviser. A financial adviser with an AFS licence can vouch for an investor who has enough investing experience to judge the offer, the value, the risks, what information they need and whether they got it (s708(10)). The adviser writes down their reasons, the investor signs a form acknowledging there is no disclosure document, and both have to happen before or when the offer is made. It has to be done again for each offer.
• Be a professional investor (s708(11)). This is a list: licensed financial services firms, bodies regulated by APRA (other than superannuation trustees), super funds with at least $10 million in net assets, anyone who has or controls at least $10 million in gross assets (counting assets held by an associate or a trust they manage), listed companies and their related companies, and a few others named in the Act's definitions.
• Be an insider (s708(12)). Senior managers of the company or a related company, their spouses, parents, children and siblings, and companies (not trusts) any of them control.
• Being an existing shareholder is not on the list. Plenty of founders assume it is. The only existing-holder exemption (s708(13)) covers dividend reinvestment and bonus share plans. If you offer new shares to current shareholders for cash, each of them still has to qualify or take one of the 20 places.

It answers one question: does this investor need a disclosure document? No. Everything else still applies. You still cannot mislead them about the company. Your directors still have to pass a resolution to issue the shares. A private company still cannot have more than 50 shareholders who are not employees (s113).

And the shares still come with a resale restriction. Shares issued without a disclosure document generally cannot be sold on to retail buyers for 12 months (s707(3)), and that applies to a certified buyer's shares as much as anyone's. The small-scale explainer covers that rule.