Pooled Development Funds Amendment Act 1994

Administered by Department of Industry, Science and Resources

Legislation au C2004A04775 Not in force Act

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Pooled Development Funds
Amendment Act 1994

No. 102 of 1994

 

An Act to amend the Pooled Development Funds Act 1992,
and for related purposes

[Assented to 30 June 1994]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title etc.

1.(1) This Act may be cited as the Pooled Development Funds Amendment Act 1994.

(2) In this Act, “Principal Act” means the Pooled Development Funds Act 19921.


Commencement

2. This Act commences on 1 July 1994.

PART 2—AMENDMENTS RELATING TO THE ASSETS OF INVESTEE COMPANIES

Object of Part

3. The object of this Part is to increase the limit on the assets of an investee company from $30 million to $50 million.

Limit on size of investee company

4. Section 24 of the Principal Act is amended by omitting from subsections (1), (2) and (7) “$30 million” and substituting “$50 million”.

PART 3—AMENDMENTS RELATING TO THE MAXIMUM LEVEL OF INVESTMENT IN AN INVESTEE COMPANY

Objects of Part

5. The objects of this Part are:

(a) to increase the maximum level of investment in an investee company from 20% to 30% of a PDF’s committed capital; and

(b) to give the PDF Registration Board a discretion to allow a PDF to exceed that maximum level.

Interpretation

6. Section 4 of the Principal Act is amended by omitting “or 24(2)” from paragraph (c) of the definition of “reviewable decision” in subsection (1) and substituting “, 24(2) or 25(1)”.

PDF not to commit more than 30% of its committed capital to investee company

7. Section 25 of the Principal Act is amended:

(a) by omitting “The investment” and substituting “Unless the Board otherwise approves, the investment”;

(b) by omitting “20%” and substituting “30%”;

(c) by adding at the end the following subsections:

“(2) The Board must not give an approval under subsection (1) if the Board is satisfied that the investment is connected with a scheme or proposed scheme to which Part IVA of the Income Tax Assessment Act 1936 applies or would apply, as the case requires.

“(3) An expression used in subsection (2) of this section and in Part IVA of the Income Tax Assessment Act 1936 has the same meaning in that subsection as it has in that Part.”.


Provisions relating to approvals by Board

8. Section 28 of the Principal Act is amended:

(a) by inserting after subsection (2) the following subsections:

“(2A) An approval for the purposes of subsection 25(1) must be given subject to a condition that, at the end of a specified period, the total of:

(a) all amounts paid on the shares in the investee company held by the PDF; and

(b) all amounts remaining unpaid on those shares;

must not exceed 30% of the total of:

(c) the shareholders’ funds of the PDF; and

(d) all amounts remaining unpaid on the issued shares in the PDF.

“(2B) If:

(a) an approval is given for the purposes of subsection 25(1); and

(b) the PDF makes the investment;

the PDF must comply with the condition covered by subsection (2A).”;

(b) by inserting after paragraph (d) of the definition of “approval provision” in subsection (3) the following paragraph:

“(da) subsection 25(1); or”.

Revocation at discretion of Board

9. Section 47 of the Principal Act is amended by inserting after paragraph (a) of the definition of “revocation provision” in subsection (4) the following paragraph:

“(aa) subsection 28(2B); or”.

Criminal consequences of contravening certain provisions

10. Section 50 of the Principal Act is amended by inserting in the table in subsection (1) the following item (immediately after the item relating to section 19):

“Subsection 28(2B) $50,000”.

PART 4—AMENDMENTS RELATING TO INVESTMENT IN STARTUP BUSINESSES

Object of Part

11. The object of this Part is to remove the restriction on a PDF investing in start-up businesses.

Interpretation

12. Section 4 of the Principal Act is amended by omitting “, or under subsection 26(3) to refuse to make a declaration,” from paragraph (c) of the definition of “reviewable decision” in subsection (1).


Repeal of section 26

13. Section 26 of the Principal Act is repealed.

Application

14. The amendment made by section 12 does not apply to a decision made before the commencement of this section.

PART 5—AMENDMENT RELATING TO THE LIMIT ON SHAREHOLDINGS IN A PDF

Object of Part

15. The object of this Part is to increase from 20% to 30% the limit on shareholdings in a PDF.

Limit on shareholding in a PDF

16. Section 31 of the Principal Act is amended by omitting from subsection (1) “20%” and substituting “30%”.

PART 6—AMENDMENTS RELATING TO THE PERCENTAGE OF THE CAPITAL RAISED BY A PDF THAT MUST BE INVESTED

Object of Part

17. The object of this Part is to increase from 50% to 65% the percentage of the capital raised by a PDF that must, as a general rule, be invested within the timetable set out in section 32 of the Principal Act.

Timetable for investing funds raised by PDF

18. Section 32 of the Principal Act is amended by omitting “50%” from paragraphs (b) and (c) of the definition of “required percentage” in subsection (1) and substituting “65%”.

NOTE

1. No. 100, 1992.

[Minister’s second reading speech made in—

Senate on 6 June 1994

House of Representatives on 28 June 1994]

Overview

The Pooled Development Funds Amendment Act 1994 was enacted by the Parliament of Australia to amend the Pooled Development Funds Act 1992. The principal objective of this legislation is to update and enhance the regulatory framework governing pooled development funds (PDFs) by making several key amendments. One significant change is the increase in the asset limit for investee companies from $30 million to $50 million, which aims to allow PDFs to invest in larger companies. Additionally, the Act raises the maximum allowable investment in an investee company from 20% to 30% of a PDF’s committed capital, while also granting the PDF Registration Board discretion to approve investments exceeding this maximum. The Act also removes restrictions on PDF investments in start-up businesses and increases the limit on shareholdings in a PDF from 20% to 30%. Furthermore, it increases the percentage of capital raised by a PDF that must be invested from 50% to 65% within the stipulated timeframe, thus ensuring more efficient use of raised funds. These amendments collectively aim to provide greater flexibility and investment capacity to PDFs, thereby supporting broader economic development goals.

Scope and Application

The Pooled Development Funds Amendment Act 1994 serves to amend the Pooled Development Funds Act 1992, impacting the operations and regulations of pooled development funds (PDFs) in Australia. This Act applies to PDFs, their investments, and related entities, primarily focusing on the size of investee companies, the level of investment in such companies, and the proportion of capital that must be invested within a specific timeframe. The amendments introduced by this Act affect entities and persons involved in the management and investment activities of PDFs, including the PDF Registration Board, which has enhanced discretion in approving investments. Geographically, the Act applies on a Commonwealth level, as it is a federal legislation enacted by the Parliament of Australia. The Act includes no explicit exclusions but implicitly excludes entities or persons not involved in the management or investment activities of PDFs. The scope of the Act can be extended through subordinate instruments, although this is not specified in the text.

Key Provisions

The Pooled Development Funds Amendment Act 1994 primarily amends the Pooled Development Funds Act 1992, focusing on several key areas: the size and investment limits of investee companies, the percentage of capital that must be invested by pooled development funds (PDFs), and the removal of restrictions on PDF investments in start-up businesses. Section 4 of this Act modifies the definition of "reviewable decision" to include decisions related to the new investment limits and start-up investments. Section 24 increases the asset limit for investee companies from $30 million to $50 million, as seen in Section 25 which raises the maximum investment level in an investee company from 20% to 30% of a PDF's committed capital, with discretion for the PDF Registration Board to allow higher investments under certain conditions. The Act imposes several obligations on the parties involved. PDFs must adhere to the new investment limits unless the PDF Registration Board grants an approval, and such approvals are subject to conditions outlined in Section 28(2A) and (2B). These conditions mandate that the total investment in an investee company, including both paid and unpaid shares, should not exceed 30% of the PDF’s total shareholders' funds and unpaid shares. Furthermore, the Board is prohibited from approving investments that are connected with schemes subject to Part IVA of the Income Tax Assessment Act 1936. The Board also has the discretion to revoke approvals under Section 47 if certain conditions are met. Violations of the provisions in this Act can lead to significant consequences. For instance, contravening Section 28(2B) can result in a criminal penalty of up to $50,000, as stipulated in Section 50. This underscores the seriousness with which the Act treats adherence to its stipulations, ensuring that PDFs and investee companies comply with the new limits and conditions to avoid legal repercussions.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.