Finance Law of Australia

Equity

The client (a director in John Smith Pty Ltd) has already discussed potential law reform with the legal adviser of the company. The company already issues shares and debentures.

The legal adviser is now approached by the client to review the equity/fundraising of the company.

Assess the equity needs of the company. What monies need to be raised? When does the funds need to be raised? What time limits prescribe this raising of monies?

Does the company wish to only issue shares and debentures? Are there any alternative ways of raising equity or funds favoured by the company?

Has the company reviewed the advantages and disadvantages of using equity under the current Corporations Act 2001 and the proposed Financial Services Reform Bill 2001?

Consider what the client has to say about the needs and time limits of the company. Assess the use of equity raising and the appropriate methods of using equity for the company.

Advise on the role of shareholders in a company and need for disclosure under the Corporations Act 2001.

Discuss the role of the managed investments requirements in Chapter 5C of the Corporations Act 2001 if the company in involved in a managed investments scheme.

Assess whether debt would be more appropriate as a vehicle for raising funds for the company.

What concerns would a shareholder of the company have if the company was to alter its fundraising strategy?