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Posted: 27 November 2020

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.
Section 708 Great for Capital Raising

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