Section 708 Great for Capital Raising
Business Advisory Services Updates
Section 708 of the Corporations Act enables a private company to raise up to $2M in a 12 month period from a maximum of 20 retail investors.
“Retail Investors” are defined as people who are not “Sophisticated Investors”.
“Sophisticated Investors” are people certified by an accountant as having a net wealth of $2.5M or, for the last 2 years, had a gross income for in excess of $250,000.
There is a probation on advertising that the company is seeking to raise capital.
Companies, that aspire to raise capital, will need assistance from their accountant in the preparation of a set of documents to identify the company’s current financial position and its vision for the future.
The documentation should include:
- Financial accounts signed by the company’s directors.
- A list of the company’s directors and leadership team.
- Business Plan which articulates the company’s vision.
- Budget for the next 3 years.
- Cashflow Forecast the next 3 years.
