1. Compliance
  2. Offer information
  3. Crowdfunding issuers

Crowdfunding issuers

Page last updated: 25 Feb 2019

Crowdfunding rules make it quicker and easier for small companies to raise money. Normally if a company wishes to offer shares, the FMC Act requires them to prepare a product disclosure statement.

You do not need to prepare these documents if you are using a licensed crowdfunding service provider. Instead, you will need to provide more limited information about your business when you make offers. Check with a crowdfunding service provider to help you make a compliant offer.

As a client of the crowdfunding service they can can charge you for their services.

The provider will ask you to sign a client agreement that details what you need to do so the provider can monitor and check you.

You will need to comply with the general fair dealing provisions in Part 2 of the FMC Act. The basic obligations you will have include not making:

  • false or misleading representations, for example, you must be honest about who you are and what you're going to use the money for
  • unsubstantiated representations, for example, you must ensure you have a reasonable grounds for any financial projections provided to potential investors.

Other laws will also apply. For example, you will need to provide financial information to your shareholders under the Companies Act.  And, where you have 50 or more shareholders those shareholders may have to comply with the Takeovers Code when buying shares.