Australia: CSF Regulations: The how to guide for crowd-sourced equity funding

Last Updated: 27 June 2017
Article by Michelle Eastwell

The Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (CSF Regulations) which sets out how companies may practically go about seeking crowd-sourced equity funding (CSF) were made law. We have been closely following the process of consultation and implementation of the CSF regime, and have provided a comprehensive summary of the progression, in our previous alert.

In this alert Partners, Michelle Eastwell, Robyn Ferguson and Law Graduate, Felicity Dunstone outline the requirements of an "Offer Document" in order to ensure the offer is an eligible CSF offer.

What is an "Offer Document"?

An Offer Document is simply the document used by companies to enable them to seek funding by introducing potential investors to their company and disclosing details of the offer. It is the document that will be posted on a CSF platform when making an offer.

Overview of the CSF Regulations

Companies intending to raise funds under the CSF regime are restricted to only offering fully-paid ordinary shares to investors. The offeror must also ensure that in making a CSF offer it does not intend to use the funds to provide a loan to any related parties of the company.

The CSF Regulations have been introduced to guide eligible companies on how to raise funds under the CSF regime in compliance with the Corporations Act 2001 (Cth) (Corporations Act). The CSF Regulations have been drafted in a practical and user-friendly way for companies, prescribing that the Offer Document includes the following minimum content:

  • Section 1: Risk warnings
  • Section 2: Information about the offering company
  • Section 3: Information about the offer
  • Section 4: Information about investor rights

It is possible to include additional information in an Offer Document. However, an offeror should always ensure that any additional information is not misleading or deceptive.

Section 1: Risk warnings

All Offer Documents must include a warning statement that highlights the risks to investors injecting funds into a growing and not yet fully stable company. The CSF Regulations set out the exact wording that should appear at the start of the Offer Document


Section 2: Information about the offering company

This section of the Offer Document is intended to introduce the investor to the company and its key individuals in order to allow the investor to better evaluate the company's prospects and make an informed choice before they decide to invest.

The Company: The Offer Document must set out the basic identifying details of the company including, the name, company type, Australian Company Number, registered office and principal place of residence as well as any convictions or penalties against the company (within the preceding decade) and any undertakings it has provided.

The Key Personnel: The identifying details of the key individuals (directors and senior management) should also be outlined, such as their names, description of skills and experience relevant to the management of the company, any criminal offences or penalties, disqualification, banning orders and matters of insolvency or undertakings provided.

The Company's Business and Financials: The Company should actively disclose their business and organisational structure, debt and equity capital structure (including options, shareholders agreements and terms of the constitution) and key risks of the company's business.

A risk, for example, may include the company applying for, and not being granted, a patent. Financial statements for the company's most recent financial year must also be included. If the company was incorporated in the current financial year, the financial statements must cover as much of the financial year as possible and end one month before the CSF offer is made. All financial statements must be prepared in accordance with accounting standards.

Section 3: The CSF offer

The CSF offer should clearly outline the securities being offered for issue and the rights attaching to them, the minimum and maximum amount of funds sought under the offer and the maximum expected duration of the offer. There must be a clear description of how the offeror intends to use the proceeds from the offer (including in the case where there is an excess of the maximum subscription amount). Disclosure should be made around whether any of those funds will be paid to a current or proposed director or senior manager, a CSF intermediary, anyone promoting or marketing the offer, a holder with 20 per cent or more of the voting rights in the company and any related parties.

Section 4: Investor's rights

The key rights of investors (to a 5 business day cooling off period and to ask questions using the communication facility) must be outlined in the Offer Document.

Additionally, the Offer Document should outline any corporate governance concessions that may apply to the company, including:

  • exemptions from audited financial accounts for up to five years;
  • the company not being required to hold an Annual General Meeting for up to five years; and
  • the reduced regulatory compliance in respect of annual financial reports, directors' reports and auditor's reports for up to five years.

The CSF Regulations will commence at the same time as Schedule 1 to the Corporations Amendment (Crowd-sourced Funding) Act 2017 which is timetabled for September 2017.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

2015 AFR Beaton Client Choice Awards:
Best Law Firm (revenue $50m - $200m)
Best Professional Services Firm (revenue $50m - $200m)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Michelle Eastwell
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions