Legislation changes have been passed to allow public companies, which are unlisted, to use crowdfunding to raise money from small time investors (otherwise known as “mum and dad” investors). This legislation has been successfully passed in the lower house of parliament.
There was a lot of criticism of this bill from the opposing parties. The bill will allow companies to raise as much as $5 million, even if they are not listed, and have a combination of assets and turnover that is less than $5 million already. This can be done once per year, using the highly popular method of crowdfunding.
Those who are wondering what exactly crowdfunding is, might need to consult experienced commercial lawyers or do some research on the subject. But a basic explanation is, crowdfunding allows people and companies to ask for money from potential customers and investors, for products, services, and business ventures that have not actually come into fruition yet. This type of thing is commonplace in countries like the USA, so many people see no issue with bringing that kind of practice to small businesses in Australia. After all, small companies are typically in need of the most help from legislation. However, there are some deeper issues to look at.