Pooled Development Funds Act 1992
No. 100, 1992
Compilation No. 27
Compilation date: 14 October 2024
Includes amendments: Act No. 39, 2024
About this compilation
This compilation
This is a compilation of the Pooled Development Funds Act 1992 that shows the text of the law as amended and in force on 14 October 2024 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.
Application, saving and transitional provisions for provisions and amendments
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part 1—Preliminary
1 Short title
2 Commencement
3 Object of the Act
4 Interpretation
4A Definition of widely‑held complying superannuation fund
4B Application of the Criminal Code
Part 3—Becoming a PDF
10 How a company becomes a PDF
11 Application for registration declaration
12 Further information may be requested
13 Period within which registration application to be decided
14 Deciding a registration application
15 Applicant to be notified of decision
16 Board to publish notice of registration declaration in the Gazette
17 A PDF’s approved investment plan
18 Conditions of registration declaration
Part 4—Regulation of PDFs
Division 1—Making investments
19 Investments to be in accordance with this Division
20 First kind of allowed investment: acquiring shares
20A Second kind of allowed investment: acquiring non‑transferable options
20B Third kind of allowed investment: lending money to existing investee companies
21 Intended use by investee company of money invested by PDF
22 Investee company must not be a PDF
23 Primary activity of investee company must not be an excluded activity
24 Limit on size of investee company
25 PDF not to commit more than 30% of its committed capital to investee company
27 Amount invested in investee company to be at least 10% of its paid‑up capital
27A
Overview
The Pooled Development Funds Act 1992 was enacted by the Commonwealth Parliament to address the gap in providing patient equity capital, including venture capital, to small and medium-sized Australian enterprises carrying out eligible businesses. The primary objective of the Act is to develop and demonstrate the potential of the market for such investments. To achieve this, it establishes a scheme under which companies that provide this type of capital can become pooled development funds (PDFs), which entitles them to more competitive tax treatment. The Act regulates the formation, investment activities, and compliance of PDFs, ensuring they adhere to specific investment rules and reporting requirements to maintain their eligibility for the benefits provided.
Scope and Application
The Pooled Development Funds Act 1992 applies to companies seeking to become pooled development funds (PDFs), which are entities that can provide equity capital to small or medium-sized Australian enterprises engaged in eligible businesses. The Act applies nationally in Australia and governs the process by which companies can become registered as PDFs, the regulation of their investments and activities, and the monitoring of their compliance with the Act. The Act applies to eligible corporations that are trading or financial corporations formed within the limits of the Commonwealth, as defined by the Constitution. The registration process includes a detailed application process, where companies must demonstrate their suitability and compliance with specific criteria, such as having a constitution that prohibits the division of shares into classes and restricts share issuance. The Act outlines specific investment rules for PDFs, allowing them to invest in shares, non-transferable options, and loans to investee companies, subject to various conditions and limitations. The Board, specifically Industry Innovation and Science Australia, plays a central role in approving investments, overseeing compliance, and revoking registrations if necessary. The Act also includes provisions for the review and revocation of registration declarations, internal and external reviews of decisions, and offences related to non-compliance. It further provides for the regulation of venture capital entities through a separate registration and compliance regime. The Act's scope extends to ensuring that PDFs adhere to the legislative framework designed to foster investment in eligible Australian businesses while maintaining compliance and regulatory oversight.
Key Provisions
- The Pooled Development Funds Act 1992 (the "Act") governs the establishment and operation of pooled development funds (PDFs) in Australia. PDFs are companies that are granted more competitive tax treatment in exchange for providing patient equity capital to small and medium-sized Australian businesses. Section 3 of the Act sets out the object of the Act, which is to develop and demonstrate the potential of the market for providing such capital to eligible businesses. To become a PDF, a company must apply for registration with the Board (Industry Innovation and Science Australia) under section 11. The Act outlines the requirements for a registration application, including details about the company's officers, investment plan, and capital-raising plan. The Board has 60 days to decide the application under section 13. If the Board is satisfied that the company meets all the requirements, it will grant the registration and declare the company to be a PDF under section 14. The Act imposes various obligations on PDFs, including restrictions on their investments (Part 4, Division 1), capital structure (Part 4, Division 2), and activities (Part 4, Division 3). PDFs must comply with directions from the Board regarding their approved investment plans, investee companies, and shareholdings (Part 4, Division 4). Failure to comply with these directions or the Act itself may result in criminal or civil penalties (Part 7 and Part 7A). The Board is responsible for monitoring compliance by PDFs and may revoke a company's registration if it is found to be in breach of the Act or its conditions (Part 6). The Act also allows for internal and external review of the Board's decisions (Part 8).
- Area of Law
- Corporate Law & Governance
- Taxation Law
- Commercial Law
- Instrument
- Act
- Concepts
- Commencement Provisions
- Reporting & Disclosure Obligations
- Regulatory Standards
- Licensing & Registration
- Offence Provisions