Raising equity capital is a fundamental aspect of corporate finance, enabling companies to secure funds for growth, operations, or other strategic objectives. In Australia, the process is primarily governed by the Corporations Act 2001 (Cth) (Corporations Act), with a strong emphasis on disclosure requirements to protect investors.
This article provides a comprehensive overview of equity capital raising options, the intricacies of disclosure obligations, potential consequences of non-compliance, and the typical capital raising process.
Companies have several avenues for raising equity capital, each with its own set of legal, regulatory, and practical considerations:
Companies may also retain equity through dividend reinvestment plans or offer debt/hybrid securities, though these are not the primary focus of companies, we are happy to advise on this if needed. The choice of capital raising options depend on factors such as legal and regulatory considerations (including the need for a disclosure documents), time, cost, complexity, target investor base, demands on management, underwriting needs, attractiveness to investors, and liability regimes. Proprietary companies face greater restrictions then public companies as they are generally prohibited from engaging in activities requiring disclosure to investors under Chapter 6D, except as detailed below.
A key principle in raising capital by issuing shares is that offers of shares generally require disclosure to investors, unless an exemption applies. This is often referred to as the “disclosure requirement”. Subject to specific exemptions and excluding CSF offers, offers of shares for issue (s 706) require disclosure unless sections 708 or 708AA dictate otherwise.
Exemptions from the disclosure requirement are crucial, particularly for proprietary companies seeking to raise capital without contravening s 113, and for public companies aiming to minimise fundraising costs. Key exemptions include:
It’s important to note that multiple exemptions can be combined across different recipients, and even if a disclosure exemption applies, companies must still comply with advertising and anti-hawking restrictions. Companies must be aware that certain offenses, civil liabilities, and compensation provisions under the Corporations Act still apply to such offerings, particularly concerning false, misleading, or deceptive conduct.
Failing to comply with disclosure requirements can lead to serious consequences, including:
Statutory defences are available for civil and criminal liability under Chapter 6D:
Navigating the complexities of equity capital raising in Australia requires careful consideration of these disclosure requirements, exemptions, processes, and potential liabilities. Seeking specialist legal and financial advice is highly recommended to ensure compliance and optimize outcomes.
For more information, you can visit the following useful Australian Securities & Investments Commission website:
This article provides a comprehensive overview of the key concepts and considerations to register a company in Australia.
If you are considering registering a company in Australia, our team of specialist commercial lawyers are here to help every step of the way. Contact us today for a confidential discussion about your situation.
Hear how we’ve guided businesses through successful registrations and capital raising.
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Annie Jin, Mason ,Fabian You restored my faith in humanity for me, I’ll never forget your commitment & compassion in helping a wounded soldier out of the quick sand to now having faith in our justice system🙏if your looking for a loyal lawyer don’t look any further, if your looking to lose, Go to another firm, 🙏 Posted on Google K 11 September 2026 Trustindex verifies that the original source of the review is Google. I am extremely grateful to Fabian and Mason for their outstanding assistance during a very stressful and time-sensitive matter. I was facing extremely tight deadlines, and Fabian took the time to carefully review a substantial amount of material. His advice and responses were consistently clear, precise and thoughtful. His attention to detail gave me enormous confidence that important issues would not be overlooked. Within only one or two days, Fabian assisted me through a difficult negotiation under significant pressure. 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I am truly grateful for everything you did for me. Posted on Google Xiao Yuan Tang 31 March 2026 Trustindex verifies that the original source of the review is Google. Fabian and Annie were both great to deal with. Annie was especially very dedicated, always quick to respond, and explained everything really clearly. They made the whole process much easier and less stressful. Really appreciate all their help, and I’ll definitely keep working with them in the future. Posted on Google Yurica Oh 22 January 2026 Trustindex verifies that the original source of the review is Google. I cannot thank Fabian Hoffmann and the team at Boettcher Law enough for their outstanding support. We were given sudden notice of lease expiry right before the Christmas–New Year period, and Fabian responded promptly and professionally throughout what could have been a very stressful situation. 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They have been my trusted partner when I needed legal services and advice. I can highly recommend Fabian Hoffmann and his team! Posted on Google Robert Yifu Wei 4 September 2025 Trustindex verifies that the original source of the review is Google. Fabian and the team were extremely responsive and helpful with our matter. Posted on Google Channelle 3 August 2025 Trustindex verifies that the original source of the review is Google. I was referred to Mason at Boettcher Law by a friend as I needed help with a property matter. Mason and Annie were brilliant - they were professional, super responsive and lovely to deal with. They sorted my matter quickly (having become unexpectedly urgent) and their rates were great, especially given the excellent service. Would 100% use them again if needed. Highly recommend. Posted on Google Maryana Sedarous 16 July 2025 Trustindex verifies that the original source of the review is Google. Fabian worked patiently and attentively with us, and helped us prepare our affidavits and paperwork for our hearings. He went out of his way to ensure everything was properly prepared and on time. I have since recommended him to other family members and would recommend him to anyone else who asks. Posted on Google armando fernandez 7 July 2025 Trustindex verifies that the original source of the review is Google. Excellent work, earnest, committed and responsible. Annie and Fabian are highly recommended Grear solicitors
Yes. Speaking too soon without protecting your company contractually can potentially result in losing control of your company or breaching the Corporations Act.
We are happy to advise you on the best structure to implement raising equity based on you and your companies’ circumstances.
It is recommended not to this for the reasons set out in the article above. Offering shares for equity raising without the proper contracts and agreements in place can expose you and your company to substantial risk.
Get expert legal advice on registration and capital raising.