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POOLED DEVELOPMENT FUNDS AMENDMENT ACT 2000 NO. 64, 2000 - SCHEDULE 1
- Pooled Development Funds Act 1992
1 Section 3
Repeal the section, substitute: 3 Object of the Act
- (1)
- The
object of this Act is to develop, and demonstrate the potential of, the market
for providing patient equity capital (including venture capital) to small or
medium-sized Australian enterprises that carry on eligible businesses.
- (2)
- To achieve this object, the Act establishes a scheme under which companies
that provide that kind of capital can become pooled development funds ( PDFs
), which entitles them to more competitive tax treatment.
2 Subsection 4(1) (at the end of paragraph (a) of the definition of
shareholders' funds )
Add "(but not including any amounts remaining unpaid on
the shares)".
3 Subsection 4(1)
Insert: widely-held complying
superannuation fund has the meaning given by section 4A.
4 After section 4
Insert: 4A Definition of widely-held complying
superannuation fund
- (1)
- For the purposes of this Act, a fund is a
widely-held complying superannuation fund if:
- (a)
- it is not an excluded superannuation fund (within the meaning of the
Superannuation Industry (Supervision) Act 1993 ); and
- (b)
- it satisfies the test in either subsection (2) or (3).
Resident funds
- (2)
- A fund satisfies the test in this subsection at a
particular time during a year of income of the fund (within the meaning of the
Income Tax Assessment Act 1936 ) if it is a complying superannuation fund for
the purposes of Part IX of that Act in relation to the year of income.
Non-resident funds
- (3)
- A fund satisfies the test in this subsection if:
- (a)
- it is a superannuation fund (within the meaning of the Superannuation
Industry (Supervision) Act 1993 ); and
- (b)
- it is a non-resident superannuation fund (within the meaning of the
Income Tax Assessment Act 1936 ); and
- (c)
- it is established for the sole or principal purpose of providing
retirement benefits for its members; and
- (d)
- it complies with the applicable laws of a foreign country that regulate
funds established for that purpose.
5 Paragraph 14(1)(e)
Omit "can and will", substitute "is reasonably likely to
be able to".
6 Paragraph 18(c)
Omit "reduce its share capital or buy shares
in itself", substitute "reduce its share capital, or buy shares in itself,
within 2 years after becoming a PDF or merging with another PDF as mentioned
in section 32A".
7 At the end of section 19
Add:
- (2)
- There are 3 kinds of
investment that a PDF is allowed to make under this Division:
- (a)
- subscribing for or buying shares (see section 20);
- (b)
- acquiring non-transferable options to buy shares (see section 20A);
- (c)
- lending money to companies (see section 20B).
- (3)
- The other sections of this Division (sections 21 to 28A) apply to each of
those kinds of investment.
- Note: In particular, section 27 provides that, unless the Board otherwise
approves, immediately after an investment of any of the above kinds is made,
the total of all amounts paid on the shares in the investee company held by
the PDF must be at least 10% of the total of all amounts paid on the issued
shares in the investee company. (This means that the PDF must hold at least
10% of the paid-up share capital in the investee company before the PDF can
acquire non-transferable options in the company or lend it money.)
8 Subsection 20(1)
Omit "The investment must be made", substitute "A PDF may
make an investment".
- Note: The heading to section 20 is replaced by the
heading " First kind of allowed investment: acquiring shares ".
9 After section 20
Insert: 20A Second kind of allowed investment: acquiring
non-transferable options
- (1)
- A PDF may make an investment by acquiring an
option to subscribe for or buy shares in a company (in this Division also
called the investee company ).
- Note: However, section 27 provides that, unless the Board otherwise approves,
a PDF cannot make such an investment unless it first holds shares in the
investee company. The total of all amounts paid on those shares must be at
least 10% of the total of all amounts paid on the issued shares in the
investee company.
- (2)
- The option must be exercisable only by the PDF. It must not be capable of
being transferred to another person.
- (3)
- If the PDF later wishes to exercise the option by subscribing for or
buying any of those shares, it must comply with section 20 and the other
provisions of this Division that relate to section 20 investments: the
exercise of the option is treated as a new investment that is separate from
the acquisition of the option.
20B Third kind of allowed investment: lending money to existing investee
companies - (1)
- A PDF may make an investment by lending money to a company (in
this Division also called the investee company ) under an agreement with the
investee company.
- Note: However, section 27 provides that, unless the Board otherwise approves,
a PDF cannot make such an investment unless it first holds shares in the
investee company. The total of all amounts paid on those shares must be at
least 10% of the total of all amounts paid on the issued shares in the
investee company.
- (2)
- Immediately after the agreement is entered into, the total of the
outstanding amounts of loans that the PDF has made (other than the amounts of
unregulated investments) must not exceed 20% of the shareholders' funds of the
PDF.
10 Subsection 21(1)
Omit all the words before paragraph (a), substitute:
- (1)
- The PDF must believe, on reasonable grounds, that:
- (aa)
- if the investment is covered by section 20 (shares)—the shares
concerned are being, or were, issued or allotted for the sole or principal
purpose of raising money; or
- (ab)
- if the investment is covered by section 20A (options)—the money paid
as consideration for the option concerned is being raised solely or
principally; or
- (ac)
- if the investment is covered by section 20B (loans)—the loan money
concerned is being borrowed solely or principally;
for use in doing one or more of the following:
11 Subsection 21(4)
After "investment", insert "(including the acquisition of
an option)".
12 At the end of section 22
Add:
- (2)
- However, nothing in this
Division prevents a PDF from making an investment that is allowed by section
32A (which deals with mergers of PDFs).
13 After paragraph 25(1)(b)
Insert:
and (ba) all amounts the PDF has paid to acquire options in the investee
company that the PDF has not yet exercised; and
- (bb)
- all amounts the PDF has lent to the investee company that remain
outstanding;
14 After section 27
Insert: 27A PDF to notify Board of initial investments
As soon as practicable, and in any event within 30 days, after a PDF invests
in a particular investee company for the first time, the PDF must give the
Board a written notice setting out full particulars of the investment.
15 At the end of Division 1 of Part 4
Add: 28A Indirect investments
This Act applies to investments made by a PDF through one or more interposed
entities as if the PDF had made the investments directly.
16 After paragraph 29(2)(a)
Insert:
- (aa)
- as allowed by section 32A (which
deals with mergers of PDFs); or
17 Subsection 31(1)
Omit "ADI or a life office)", substitute "ADI, a life
office or a widely-held complying superannuation fund)".
18 Subsection 31(1)
Omit "banks or life offices)", substitute "ADIs, life offices or widely-held
complying superannuation funds)".
19 After subsection 31(2)
Insert:
- (2A)
- However, in determining whether a person is an associate of another person,
disregard any connection those persons have with or through a PDF.
- Example: This means that, despite paragraph (1)(d), the fact that 2 persons
are both officers of the same PDF does not make the officers associates of one
another (although they would still be associates if they were both officers of
the same non-PDF company).
- (2B)
- This section does not prevent a PDF from merging with another PDF as
mentioned in section 32A.
20 After section 32
Insert: 32A PDFs may merge
- (1)
- A PDF (the investor PDF
) may acquire shares in another PDF (the investee PDF ) if, and only if, the
acquisition is part of a process of the 2 PDFs merging into one PDF.
- (2)
- Any consideration given to the shareholders in the investee PDF for the
acquisition must be in the form of:
- (a)
- shares in the investor PDF; or
- (b)
- a genuine dividend payable from any undistributed profits of the investee
PDF;
or both.
- (3)
- The investor PDF must give the Board written notice before making an
acquisition allowed by this section.
21 After paragraph 41(1)(d)
Insert:
- (da)
- for each of the PDF's investee
companies (within the meaning of Division 1 of Part 4), the proportion of the
investee company's issued share capital held by the PDF at the end of the
financial year;
- (db)
- the amounts of all profits, gains or losses the PDF made during the
financial year from each such investee company;
- (dc)
- the amounts of all unregulated investments held by the PDF at the end of
the financial year;
- (dd)
- the amounts of all profits, gains or losses the PDF made during the
financial year from unregulated investments;
22 After paragraph 41(1)(i)
Insert:
- (ia)
- full particulars of the dividends
the PDF paid to the shareholders in the PDF during the financial year;
23 Paragraph 47(1)(a)
Omit "revocation provision", substitute "provision of
this Act".
24 Paragraph 47(1)(d)
Repeal the paragraph, substitute:
- (d)
- the
Board is satisfied that a condition of the PDF's registration has been
contravened by, or in relation to, the PDF.
25 Subsection 47(4)
Repeal the subsection.
26 Subsection 50(1) (table)
Repeal the table, substitute:
Penalties for contraventions of this Act
|
Item
| Provision
| Penalty
|
1
| Section 19 (investments not made in accordance
with Division 1 of Part 4 other than section 27A)
| 500 penalty units
|
2
|
Section 27A
| 50 penalty units
|
3
| Subsection 28(2B)
| 500 penalty units
|
4
|
Subsection 29(1)
| 500 penalty units
|
5
| Subsection 29(2)
| 500 penalty units
|
6
| Subsection 30(1)
| 200 penalty units
|
7
| Subsection 32(2)
| 100 penalty units
|
8
| Subsection 33(4)
| 100 penalty units
|
9
| Subsection 34(3)
| 50 penalty units
|
10
| Subsection 35(3)
| 50 penalty units
|
11
| Subsection 41(1)
| 50 penalty units
|
12
| Subsection 42(1)
| 50 penalty units
|
13
| Subsection 43(4)
| 50 penalty units
|
14
| Subsection 46(2)
| 100 penalty units
|
27
Application of amendments
General
(1) The amendments made by this Act
(except for those mentioned in the following subitems) apply, in relation to a
PDF, from the beginning of the PDF's 1999-2000 income year (the transition
time ).
(2) In subitem (1):
income year has the same meaning as in the
Income Tax Assessment Act 1997 .
Registration decisions
(3) The amendment
made by item 5 applies to a decision about registration that the Board makes
after the transition time, even if the application for registration was made
before that time.
Notification of initial investments
(4) The amendments
made by items 14 and 26 apply to investments made after this item commences.
Interposed entities
(5) The amendment made by item 15 applies to investments
made after 4 August 1999.
(6) However, the Board may determine that that
amendment does not apply to a particular investment if the Board is satisfied
that the relevant PDF, or the interposed entity that is to make the
investment, was already under a legal obligation to make the investment at the
end of 4 August 1999.
Annual returns
(7) The amendments made by items 21 and
22 apply to annual returns for the 1999-2000 financial year and all later
financial years.
Revocation power
(8) The amendments made by items 23, 24
and 25 apply to contraventions of this Act, or of a condition of a PDF's
registration, that happen after this item commences.
[ Minister's second
reading speech made in—
House of Representatives on 8 December 1999
Senate on 13 April 2000 ]
(226/99)