Apart from the income tax reductions that had previously been announced, the Federal Budget contained only a few measures directed at SMEs, including:
- Crowd Sourced Equity Funding
Previously, only unlisted public companies were permitted to use crowd sourcing as a means of fundraising pursuant to amendments to the Corporations Act 2001 (Cth) introduced by the Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) in March 2017.
The Federal Budget announced the Federal Government's plans to extend the crowd sourced funding regime so that all private companies can engage in crowd sourced equity funding.
At present, companies that engage in crowd sourced equity funding are required to maintain a minimum of two directors, conduct their financial reporting in accordance with accounting standards, audit their financial statements and are restricted from engaging in certain related party transactions. It is likely that these obligations will also apply to proprietary companies engaging in such fundraising measures.
We believe that these changes to the crowd sourced equity funding regime will be of particular benefit to technology companies and start-ups, which are not typically public companies, as it will provide them with the access to the crowd funding platforms.
- Immediate Write Offs for Small Business
The $20,000 immediate asset write-off for small businesses was slated to end on 30 June 2017. The Federal Budget extends this tax break by 12 months to 30 June 2018. This immediate asset write-off is available to businesses with an aggregated turnover of less than $10 million per annum. As of 1 July 2018, the immediate asset write-off threshold will revert to $1,000.
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