Developers, real estate agents and existing shareholders frequently market company title shares to the public.
These marketing activities need to bring into account Part 6D.2 of the Corporations Act 2001, and the Australian Financial Services Licensing provisions.
Legal requirements for marketing Company Title Shares
Part 6D.2 requires anyone marketing shares to disclose certain information to potential purchasers.
Thankfully, ASIC has provided a conditional exemption for compliance with Part 6D.2 for secondary sales of shares in company title buildings. The exemption depends on the sale contract containing certain terms and information.
This means that an existing shareholder can sell his or her shares through a real estate agent without having to produce a disclosure document such as an offer information statement.
However, as the relief relates only to secondary sales of shares, developers who wish to issue shares in a new company title development may have more difficulties. This problem can be managed by selecting a fitting structure for the transaction and carefully crafting an application for relief from ASIC.
If you have any questions about how to properly market company title shares, add your comments below.