Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Call for easier capital raising for small business

For immediate use
Monday 13 August 2001


Call for easier capital raising for small business

The Commercial & Business Law Committee of the New Zealand Law Society is calling for law changes to make it easier and cheaper for small businesses to raise capital through employee stock options.

In a proposal to the Securities Commission titled ‘Small Businesses Raising Capital”, the Committee said the Securities Act often acts as an impediment to this type of investment.

“In many cases a lengthy prospectus and investment statement process is required which many developing business simply cannot afford,” Committee Convener Simon McArley said.

While these impediments may be designed to protect public investors, the Committee believes that they could be relaxed without reducing the protection afforded to investors. The Committee proposes small business be exempt from this requirement providing there is sufficient evidence that employees have received independent financial, legal and tax advice.

Simon McArley said in overseas jurisdictions employee stock options have been a major source of funding for IT and knowledge-based industries.

This form of funding reduces a business’ wage bill and capitalises the business by provision of labour. Employees can accept a lower fixed salary, against the possibility of a substantial benefit if the business succeeds.

Simon McArley said: “It has been suggested that many highly skilled New Zealanders have taken up jobs overseas because of the benefits offered by this type of investment.”

The Committee has discussed the proposal with the Minister of Commerce (Hon Paul Swain) and other interested industry groups, and has been encouraged to raise the matter formally with the Securities Commission.

“This is a relatively simple and quick means by which the Securities Commission could assist those developing the knowledge economy to kick start their business growth. The solution does not require new legislation or additional regulations, but can be achieved by a simple exemption notice procedure.

“We hope the Commission will give favourable consideration to granting such an exemption,” Simon McArley said.

ENDS

Contact: Simon McArley, Convener, Commercial and Business Law Committee

Tel: (04) 498 0854 (work)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Manawatu-Whanganui Projects: PGF Top-Up To Rural Broadband Roll-Out

The government has effectively raided the $3 billion Provincial Growth Fund to top up the budget for the second phase of its rural broadband initiative, filling in mobile 'black spots' and ensuring broadband is available to marae that don't have access now. More>>

ALSO:

Other Windy Cities: Auckland-Chicago Named A Top 10 ‘Most Exciting’ New Route

The inclusion of Auckland-Chicago on Lonely Planet’s Where to fly in 2019? The 10 most exciting new flight routes list comes just two weeks before Air New Zealand prepares to celebrate its inaugural flight to Chicago’s O’Hare International Airport on 30 November. More>>

Deadly Strain: ESR Ups Its Reporting On Meningococcal Disease

The increasing number of cases of Group W Meningococcal disease (MenW) has prompted ESR to increase its reporting on the disease to the Ministry of Health. ESR has upped its reporting to weekly. More>>

ALSO:

Very Small Things: "Game-Changing" 3D Printing Technology Launched

New Zealand microfabrication researchers Andrea Bubendorfer and Andrew Best, the co-inventors of a new way of fabricating very small things with Laminated Resin Printing (LRP), are part of Callaghan Innovation’s MicroMaker3D team launching the new patent pending technology in the US this week. More>>

ALSO: