House of Representatives
Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017
Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)See http://www.treasury.gov.au/~/media/Treasury/Consultations%20and%20Reviews/Consultations/2015/Crowd-sourced%20equity%20funding/Key%20Documents/PDF/Crowd-sourced-equity-funding.ashx.
See https://treasury.gov.au/ConsultationsandReviews/Consultations/2017/Extending-CSF-to-proprietary-companies
Based on ABS labour rates in the RIS guidelines, including employer costs.
Based on leisure time rates in the RIS guidelines.
While growth rates in other comparable CSF markets have been taken into account, the growth rate of companies using CSF remains inherently speculative.
An average of 6 years has been estimated on the basis that the assumption under the CSF public company model (option 1, and previously estimated in a RIS dated December 2016) was 4 years. However, proprietary companies undertaking CSF are expected, on average, to be smaller and raise less funds than public companies would have under the status quo as the removal of the requirement to convert to a public company will provide less of a barrier to companies entering the CSF market. This 6 year estimate remains speculative as it is difficult to forecast how the CSF market will develop over time.
In the absence of reliable data on charge-our rates for small legal firms, estimate obtained from Hays data on salaries for legal staff, assuming a senior associate at a small private practice with a $120,000 annual salary corresponding to an hourly rate of $61.53. A 1.75x multiplier is applied to approximate charge-out costs, based on the approach for labour rates in the RIS guidelines.