Young companies can’t raise capital from the public?

This is a MYTH!

In 2017, the Australian Government created the ‘Early-Stage Innovation Company Status’ by making amendments to the Income Tax Act to enable small, young companies that have been undertaking ‘innovative activities’ to raise capital from investors, with built-in ‘encouragement’ to investors to invest in ‘qualifying companies’.

The Early-Stage Innovation Company (ESIC) Status is clearly targeted at SMEs.

This week, we will discuss the opportunities for qualifying companies and the ‘encouragement’ that the government is offering investors, to invest in companies which qualify for the ‘Early-Stage Innovation Company’ status.

Companies which have been incorporated under section 708 of the Corporations Act and who have undertaken innovative activities can be eligible.

The first test is the ‘Test Time Determinations’. The three (3) components of companies that can apply are…

Company under three (3) years of age: expenses of less than $1M in the income year before the current year. Assessable income of less than $200,000 (excluding any grant funds from the Accelerating Commercialisation Grant) in the income year before the current year. Not listed on a stock exchange anywhere in the world.

Company under six (6) years of age: across the last three of those income years incurred total expenses of $1M or less. Total assessable income of less than $200,000, (excluding any grant funds from the Accelerating Commercialisation Grant) in the income year before the current year. Not listed on a stock exchange anywhere in the world.

Company registered on Australian Business Register in the last three (3) years: expenses of less than $1M in the income year before the current year. Total assessable income of less than $200,000 (excluding any grant funds from the Accelerating Commercialisation Grant) in the income year before the current year. Not listed on a stock exchange anywhere in the world.

Does this sound like your company?

Towers Business Development can assist your company undertake ‘due diligence’ and documentation relative to the ESIC Status. Contact us on 1800 232 088 or email to get started.