Corporate Fundraising Essay Example | Topics and Well Written Essays - 1750 words

Corporate Fundraising - Essay Example According to s 715A, the offer document should be presented and worded in a concise, clear and effective style. An offer document should supply with all relevant information and material to the investor and by doing so, the company would help the investor to make a wise investment decision. Thus, an offer document should be prepared as the guidelines provided in CA 20011. A proprietary company in Australia is barred from fund raising from the public. Some types of demeanour by corporations in Australia pertaining to financial services and products like the making of deceptive or bogus statements or involving in deceptive or deceptive conduct is barred. However, under s 113(3), a proprietary company can raise funds from the general public if the fundraising does not require a disclosure document where there is an exception. A corporation is not required to file a lengthy prospectus if it is exempted under s 708 or if the quantum of money to be raised is $ 10 m or less from the public. A company is required to file only an offer information statement if the amount that is going to be raised is $ 10 m or less. ... If the issue size is $ 5 million or less, an Australian company may issue offer information statements in lieu of a prospectus. In Hurst v Vestcorp Ltd (1988) 12 NSWLR 394, it was emphasised the significance of proper disclosure documents by a company while inviting the public for investment in its shares3. It is to be noted that offer of securities obtained outside Australia will not fall under the 700 (4) of the Corporations Act 2001 (Cth). For example, if The Green Coffee Company Ltd, makes an offer of $7 million and $15 million in capital in Vietnam, then Australian laws will not be applicable. Further , if The Green Coffee Company Ltd wanted to raise $ 10 million or less , there is no need to issue a detailed prospectus or if is exempted under s 708. If it is intend to raise more than $ 10 million, it has to compulsorily file a detailed prospectus with ASIC and is bound by its statements. Application of Law The Corporation Act 2001 function to make sure that the investors are sa feguarded when they make a decision to buy shares. Assuming that the Green Coffee Company Ltd and not a proprietary limited company , if the company wants to go for public issue , then it has to observe the provisions contained in Chapter 6D of the Corporation Act 2001(Cth). There are many options available for the Green Coffee company as regards to fund raising. It may go for a public issue or may approach bankers to advance loan or issue of debentures, etc. Thus, proper mixture of minimal public issue with loan capital may offer leveraging or gearing to the company thereby enhancing its Return on Equity (ROE). In a nutshell, Green Coffee Company may engage to release an offer information statement