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This Act may be cited as the Pooled Development Funds Act 1992.
This Act commences on the day on which it receives the Royal Assent.
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.
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.
In this Act, unless the contrary intention appears:
ADI (authorised deposit‑taking institution) means:
a body corporate that is an ADI for the purposes of the Banking Act 1959; or
the Reserve Bank of Australia; or
a bank constituted by a law of a State or internal Territory.
AFOF means an Australian venture capital fund of funds within the meaning of subsection 118‑410(3) of the Income Tax Assessment Act 1997.
approved investment plan, in relation to a PDF, has the meaning given by subsection 17(2).
Board means Industry Innovation and Science Australia, established by section 6 of the Industry Research and Development Act 1986.
Chairperson means the Chairperson of the Board.
committee means a committee appointed under section 22 of the Industry Research and Development Act 1986.
company means a company that is incorporated, or taken to be incorporated, under the Corporations Act 2001 and that has a share capital.
director, in relation to a body corporate, means a person who is a director of the body for the purposes of the Corporations Act 2001.
eligible business means a business that does not consist, or consist primarily, of an excluded activity.
eligible corporation means a body corporate that is, for the purposes of paragraph 51(20) of the Constitution, a trading corporation, or a financial corporation, formed within the limits of the Commonwealth.
ESVCLP means an early stage venture capital limited partnership within the meaning of subsection 118‑407(4) of the Income Tax Assessment Act 1997.
excluded activity means a prescribed activity.
executive officer, in relation to a body corporate, means a person, by whatever name called and whether or not a director of the body, who is concerned, or takes part, in the management of the body.
give information to the Board has the meaning given by subsection 4(8) of the Industry Research and Development Act 1986.
hold, in relation to shares, has the meaning given by subsection (4).
investment manager, in relation to a company, means:
an eligible corporation that is engaged to supply investment management services to the company; or
an eligible corporation that is a member of a partnership that is so engaged; or
an officer of an eligible corporation that is so engaged or is such a member; or
a person (other than an eligible corporation) who is a member or employee of such a partnership; or
a person (other than an eligible corporation) who is engaged to supply (otherwise than as an officer of the company) investment management services to the company; or
an employee of a natural person of a kind referred to in paragraph (e); or
an officer of a body corporate (other than an eligible corporation) that is a person of a kind referred to in paragraph (d) or (e).
life office means:
a body corporate that is registered under section 21 of the Life Insurance Act 1995; or
a public authority:
that is constituted by a law of a State or internal Territory; and
that carries on life insurance business within the meaning of section 11 of the Life Insurance Act 1995.
limited partnership has the same meaning as in the Income Tax Assessment Act 1997.
member, except in relation to a partnership, means a member of the Board.
object of this Act means the object set out in subsection 3(2).
officer, in relation to a body corporate, means a director, secretary, executive officer or employee of the company.
paid includes credited as paid.
PDF (pooled development fund) means a company in relation to which a registration declaration is in force.
PDF constitution requirements has the meaning given by subsection (3).
PDF investment means an investment made in accordance with Division 1 of Part 4.
permitted short‑term borrowing means a borrowing of money that is made:
because of temporary cash flow problems; and
solely for temporary purposes (other than the purpose of repaying other money borrowed for temporary purposes).
person affected, in relation to a reviewable decision, means the company, PDF or person referred to in the relevant paragraph of the definition of reviewable decision.
produce a document to the Board has the meaning given by subsection 4(8) of the Industry Research and Development Act 1986.
registration application means an application under section 11 that was made before the day on which Part 4 of Schedule 8 to the Tax Laws Amendment (2007 Measures No. 2) Act 2007 commenced.
registration declaration means a declaration under section 14 that a company is registered as a PDF.
relevant officer, in relation to a company, means:
a director of the company; or
any other person who, as an officer of the company, supplies investment management services to the company.
resident investment vehicle has the same meaning as in the Income Tax Assessment Act 1997.
reviewable decision means a decision:
under section 14 to refuse to make a registration declaration in relation to a company; or
under section 17 to refuse to approve a variation of a PDF’s approved investment plan; or
under paragraph 20(1)(b), subsection 20(2), 23(1), 24(2) or 25(1), or section 27, to refuse to give an approval in relation to an investment proposed to be made by a PDF; or
under paragraph 29(2)(b) to refuse to give an approval to a PDF entering into a transaction; or
under subsection 31(1) to refuse to give an approval in relation to a person’s shareholding in a PDF; or
under subsection 32(1) to refuse to make, in relation to a payment day (within the meaning of that subsection) of a PDF, a determination for the purposes of paragraph (a) of the definition of investment period or required percentage in that subsection; or
under subsection 33(2), 34(1), 35(1) or 36(1) to give a person a direction; or
under section 47 to revoke a registration declaration in relation to a company; or
under section 52A to refuse to register an entity under Part 7A; or
under section 52D to revoke such a registration.
shareholders’ funds, in relation to a company, means the total of:
the amount of the company’s share capital (but not including any amounts remaining unpaid on the shares); and
any amount held in any other capital reserve of the company; and
any amount held in any revenue reserve of the company; and
the amount of any undistributed profits of the company.
unregulated investment means an investment of a prescribed kind.
VCLP means a venture capital limited partnership within the meaning of subsection 118‑405(2) of the Income Tax Assessment Act 1997.
venture capital entity has the same meaning as in the Income Tax Assessment Act 1997.
venture capital equity has the same meaning as in the Income Tax Assessment Act 1997.
widely‑held complying superannuation fund has the meaning given by section 4A.
The effect that a provision of this Act has because of a paragraph of the definition of investment manager in subsection (1) is additional to, and does not prejudice, the effect that:
the provision has because of any other paragraph of that definition; or
any other provision of this Act has because of the first‑mentioned paragraph.
For the purposes of this Act, a company’s constitution satisfies the PDF constitution requirements if, and only if, it:
prohibits the division of the company’s shares into classes; and
prohibits the issue or allotment of a share in the company, or a unit (as defined in section 9 of the Corporations Act 2001) of such a share, unless the share is an ordinary share; and
prohibits the issue or allotment of a share in the company, or a unit (as so defined) of such a share, if the rights attached to the share would be different from the rights attached to other shares in the company that are still on issue.
For the purposes of this Act, a person who subscribes for or buys shares is taken to hold the shares from the time of the subscription or purchase until the person no longer has in the shares an interest of any kind (whether legal or equitable).
For the purposes of this Act, a fund is a widely‑held complying superannuation fund if:
it has 5 or more members; and
it satisfies the test in either subsection (2) or (3).
Resident funds
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 the Income Tax Assessment Act 1997 in relation to the year of income.
Non‑resident funds
A fund satisfies the test in this subsection if:
it is a superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993); and
it is a foreign superannuation fund (within the meaning of the Income Tax Assessment Act 1997); and
it is established for the sole or principal purpose of providing retirement benefits for its members; and
it complies with the applicable laws of a foreign country that regulate funds established for that purpose.
Chapter 2 of the Criminal Code applies to all offences created by this Act.
Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
A company becomes a PDF when a registration declaration made in relation to the company comes into force.
A registration declaration:
comes into force:
on the day when it is made; or
if it is expressed to take effect on a later day—on that later day; and
remains in force until it is revoked under Part 6.
A company may apply to the Board for a registration declaration to be made in relation to the company.
An application must be in writing and must include the following information:
the name, address, occupation, qualifications and experience of each relevant officer of the applicant;
for each person or partnership (if any) whom or that the applicant has engaged, or proposes to engage, to supply (otherwise than as an officer of the applicant) investment management services to the applicant:
the name and address of the person or partnership; and
in the case of a natural person—the person’s occupation, qualifications and experience; and
the name, address, occupation, qualifications and experience of each natural person who is supplying, or will supply, such services to the applicant:
if the first‑mentioned person is a natural person—as an employee of the first‑mentioned person; or
if the first‑mentioned person is a body corporate—as an officer of the body; or
in the case of a partnership—as a member or employee of the partnership or as an officer of a body corporate that is such a member;
the applicant’s issued share capital and paid‑up share capital;
the capital‑raising plan that the applicant proposes to implement if it becomes a PDF;
the investment plan that the applicant proposes to implement if it becomes a PDF;
the address of the applicant’s registered office;
the name and address of, and number of shares in the applicant held by:
if there are not more than 10 shareholders in the applicant—each of those shareholders; or
if there are more than 10 shareholders in the applicant—each of the 10 of those shareholders who hold the greatest number of shares in the applicant;
any other information that a determination in force under subsection (5) requires the application to include.
An application may also include any other information that the applicant thinks is relevant.
An application must be accompanied by a copy of the applicant’s constitution.
An application must not be made on or after the day on which Part 4 of Schedule 8 to the Tax Laws Amendment (2007 Measures No. 2) Act 2007 commenced.
The Board may, for the purposes of paragraph (2)(h), determine, by legislative instrument signed by the Chairperson pursuant to a resolution of the Board, that specified information is to be included in registration applications.
If the Board needs further information to decide a registration application, it may ask the applicant to provide the information.
Subject to this section, the Board must decide a registration application within 60 days after receiving it.
If the Board thinks that it will take longer to decide the application, the Board may extend, by up to 60 days, the period for deciding it.
An extension must be made by written notice given to the applicant within 60 days after the Board receives the application.
If the Board makes an extension, the Board must decide the application within the extended period.
If the Board has not decided the application by the end of the day by which the Board is required to decide it, the Board is taken to have decided, at the end of that day, to refuse the application.
The Board must grant a registration application, and declare the applicant to be registered as a PDF, if the Board is satisfied that:
the applicant has complied, in relation to the application, with this Part and with any requests made by the Board under section 12; and
the applicant is an eligible corporation; and
the applicant’s investment plan (being the investment plan set out in the registration application or that plan as since varied in negotiations with the Board) is appropriate, having regard to:
the object of this Act; and
the requirements of this Act relating to the making and holding of investments by a PDF; and
the capital‑raising plan set out in the registration application is appropriate, having regard to the requirements of this Act relating to the raising of capital by a PDF; and
the applicant is reasonably likely to be able to implement those plans and comply with this Act; and
granting the application will help achieve the object of this Act; and
the applicant’s capital structure is consistent with the requirements of this Act relating to a PDF’s capital structure; and
the applicant’s constitution satisfies the PDF constitution requirements; and
section 31 will be complied with in relation to the applicant; and
the applicant holds no investments, other than unregulated investments; and
the applicant has not previously carried on business; and
the applicant has not previously derived assessable income within the meaning of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997, otherwise than from holding or disposing of an unregulated investment; and
the applicant has not previously paid a dividend to any of its shareholders; and
if the applicant has previously raised capital:
the capital was raised for one or more of the following purposes:
unless the applicant was incorporated on or after 1 July 1992—the applicant providing development capital to Australian businesses;
meeting the applicant’s costs of becoming a PDF;
meeting the applicant’s administrative expenses; and
whatever the applicant has done by way of raising capital is consistent with the requirements of this Act relating to a PDF raising capital.
For the purposes of paragraph (1)(k), the applicant is not taken to have carried on business merely because the applicant has:
raised capital by issuing ordinary shares; or
made, held, or disposed of, unregulated investments.
In deciding whether it is satisfied as mentioned in subsection (1), the Board must have regard to the information provided to it by the applicant and may have regard to any other relevant information that is available to the Board.
If the Board is not satisfied as mentioned in subsection (1), it must refuse the application.
The Board must give the applicant written notice of its decision on a registration application as soon as practicable after the decision is made.
If the decision is to refuse the application, the notice must also include a statement of the Board’s reasons for the decision.
Subsection (2) does not apply in relation to a decision that is taken to have been made because of subsection 13(5).
A failure to comply with subsection (1) or (2) in relation to a decision does not affect the validity of the decision.