$100M for Venture Capital firms

VENTURE CAPITAL companies will now be able to operate with up to $100 million in equity capital. This is one of several features of the Venture Capital (Amendment) Bill 2004 which is listed for debate in the House of Representatives on Friday. The purpose of the Bill is to amend the Venture Capital Act 1994 “to remove certain restrictions and to provide for the further development of the venture capital regime and industry.” According to Clause Seven of the Bill, Section 9 (2) of the Act will “increase the amount of equity capital with which a venture company shall carry on business from $20 million to $100 million.”

Clause Four of the Bill amends Section 4 (2) (c) of the Act by removing the requirement for a company to provide its authorised share capital upon application for registration as a venture capital company. Clause Eight amends the current Act to prohibit a venture capital company from altering the articles of incorporation or continuance or its by-laws without the written approval of the Administrator and “issued shares of a venture capital company would have to be fully paid for in cash.”

Clause Ten extends the commencement of investment from one year to two years from the date of registration or such period as approved by the Venture Capital Incentive Programme. Clause 12 states that a qualifying investee company will have “no more than the issued and fully paid up share capital as prescribed by the Minister.” This clause also removes the requirement of a qualifying company to have a prescribed number of employees.