The most significant change is the new ‘small offer’ exemption. This will allow companies to raise up to $2 million from up to 20 investors in a 12 month period, without the need for a prospectus or investment statement. The exemption provides very significant time and cost savings over the current law, and will allow businesses to raise small amounts of capital quickly and with minimal fuss.
Offers will need to be ‘personal offers’ and advertising will be restricted. However, the new exemption is otherwise very flexible, and with the correct advice provides significant scope to deliver a company’s immediate and future capital requirements.
Other new exemptions from 1 April include:
Bringing in additional investors adds complexity and risk. Getting the right corporate structure and governance arrangements in place is important. We are already working with clients to develop offer structures that take advantage of the new rules.