Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Venture Capital Bill 2002

Part 3 Registration of eligible venture capital investors

Division 21 Registration of eligible venture capital investors

   

Guide to Division 21

21-1   What this Division is about

The PDF Board can register entities as eligible venture capital investors, and revoke their registration.

Registration is one of the requirements before investments of venture capital by an entity directly (rather than through a limited partnership) can attract the operation of section 118-415 of the Income Tax Assessment Act 1997 (and the related provisions about similar income gains and losses).

Note:          Section 118-415 of the Income Tax Assessment Act 1997 gives to an individual investor an equivalent capital gains tax exemption to the one that the investor could have, under section 118-405 or 118-410 of that Act, from investing through a limited partnership registered under Part 2 of this Act.

Table of sections

Operative provisions

21-5          Registration as eligible venture capital investors

21-10        Period within which application must be decided

21-15        When registration is in force

21-20        Annual return by eligible entity

21-25        Revocation at discretion of PDF Board

21-30        Revocation on application

Operative provisions

21-5   Registration as eligible venture capital investors

             (1)  An * entity may apply to the * PDF Board, in the * form approved by the PDF Board, for registration under this Part as an * eligible venture capital investor.

             (2)  An application must be given to the * PDF Board within 30 days after the applicant enters into the contract to acquire its first * eligible venture capital investment after the commencement of this Act.

             (3)  An application must be in writing, and must include the following information:

                     (a)  the applicant’s current residency status;

                     (b)  details of the facts that qualify the applicant as a * tax-exempt non-resident;

                     (c)  the address of the applicant’s registered office;

                     (d)  the name and address of the first * company in which the applicant has invested or proposes to invest and the industry in which the company operates;

                     (e)  the amount of the investment and the date on which it was or is to be made;

                      (f)  details of any other investments that the applicant holds in the company that are not * eligible venture capital investments.

             (4)  The * PDF Board must register the applicant under this Part if the PDF Board is satisfied that the information has been provided.

             (5)  If the * PDF Board registers an applicant under this Part, the PDF Board must notify the applicant within 60 days after the application was made.

             (6)  If the * PDF Board does not register an applicant under this Part, the PDF Board must:

                     (a)  notify the applicant within 60 days after the application was made; and

                     (b)  provide reasons for the decision.

21-10   Period within which application must be decided

             (1)  Subject to this section, the * PDF Board must decide an application for registration under this Part within 60 days after receiving it.

             (2)  If the * PDF Board thinks that it will take longer to decide the application, the PDF Board may extend, by up to 60 days, the period for deciding it.

             (3)  An extension must be made by written notice given to the applicant within 60 days after the * PDF Board receives the application.

             (4)  If the * PDF Board extends the period, the PDF Board must decide the application within the extended period.

21-15  When registration is in force

             (1)  Registration of an * entity as an * eligible venture capital investor is taken to have come into force on the day on which the first investment referred to in subsection 21-5(2) was made.

             (2)  Registration is taken to be in force until revoked under section 21-25.

21-20   Annual return by eligible entity

             (1)  An * entity registered under this Part must, within 3 months after the end of each * financial year, give the * PDF Board a written return that includes the following information:

                     (a)  the entity’s residency status at the end of the financial year (including details of changes to that status during the year);

                     (b)  the address of the entity’s registered office (including details of changes to that address during the year);

                     (c)  details of the facts that qualify the entity to be tax exempt in its country of residence;

                     (d)  details of the facts that qualify the entity as an * eligible venture capital investor;

                     (e)  details of:

                              (i)  the * eligible venture capital investments the entity made during that year; and

                             (ii)  the eligible venture capital investments that the entity disposed of during that year; and

                            (iii)  the eligible venture capital investments the entity holds at the end of that year; and

                            (iv)  the disposals of eligible venture capital investments during that year including any profits derived or losses incurred from that disposal;

                      (f)  the industries to which those investments relate.

             (2)  Information about a matter that a return must include because of paragraph (1)(a) or (b) is information about that matter as at the end of the financial year.

Note:          Part 7.4 of the Criminal Code creates offences for making false and misleading statements, giving false or misleading information and producing false or misleading documents.

21-25   Revocation at discretion of PDF Board

             (1)  Subject to this section, the * PDF Board may revoke an * entity’s registration under this Part if the PDF Board is satisfied that the entity has failed to comply with section 21-20.

             (2)  As soon as practicable after revoking an * entity’s registration under this Part, the * PDF Board must give the entity a notice that advises of the revocation and sets out the PDF Board’s reasons for deciding to revoke.

             (3)  The * PDF Board must not revoke a registration unless the PDF Board:

                     (a)  by notice in writing given to the * entity, allows the entity at least 14 days after the notice is given in which to make written submissions to the PDF Board about the matters specified in the notice that, in the PDF Board’s opinion, may constitute grounds for revocation; and

                     (b)  considers any such submissions.

21-30   Revocation on application

             (1)  An * entity registered under this Part may apply in writing to the * PDF Board to have its registration revoked.

             (2)  The * PDF Board must revoke the registration as soon as practicable after receiving the application.

             (3)  The revocation takes effect on the day on which notice of the revocation is given to the * entity.