Section 717 — Corporations Act 2001 (Cth)

The following table summarises what a person who wants to offer securities must do to make an offer of securities that needs disclosure to investors under this Part and gives signposts to relevant sections:

Offering securities (disclosure documents and procedure)

Action required

Sections

Comments and related sections

1

Prepare disclosure document, making sure that it:

 sets out all the information required

 does not contain any misleading or deceptive statements

 is dated

and that the directors consent to the disclosure document.

710

711

712

713

713C

713D

713E

714

715

716

Section 728 prohibits offering securities under a disclosure document that is materially deficient.

Section 729 deals with the liability for breaches of this prohibition.

Sections 731, 732 and 733 set out defences.

2

Lodge the disclosure document with ASIC

718

Subsection 727(3) prohibits processing applications for non‑quoted securities for 7 days after the disclosure document is lodged.

3

Offer the securities, making sure that the offer and any application form is either included in or accompanies:

 the disclosure document; or

 a profile statement if ASIC has approved the use of a profile statement for offers of that kind.

721

Sections 727 and 728 make it an offence to:

 offer securities without a disclosure document

 offer securities if the disclosure document is materially deficient.

Subsection 729(3) deals with liability on the prospectus if a profile statement is used.

The securities hawking provisions (section 736) restrict the way in which the securities can be offered.

4

If it is found that the disclosure document lodged was deficient or a significant new matter arises, either:

 lodge a supplementary or replacement document under section 719 or 719A; or

 return money to applicants under section 724.

719

719A

724

Section 728 prohibits making offers after becoming aware of a material deficiency in the disclosure document or a significant new matter.

Section 730 requires people liable on the disclosure document to inform the person making the offer about material deficiencies and new matters.

5

Hold application money received on trust until the securities are issued or transferred or the money returned.

722

Investors may have a right to have their money returned if certain events occur (see sections 724, 737 and 738).

6

Issue or transfer the securities, making sure that:

 the investor used an application form distributed with the disclosure document; and

 the disclosure document is current and not materially deficient; and

 any minimum subscription condition has been satisfied.

723

Section 721 says which disclosure document must be distributed with the application form.

Section 729 identifies the people who may be liable if:

 securities are issued in response to an improper application form; or

 the disclosure document is not current or is materially deficient.

Sections 731, 732 and 733 provide defences for the contraventions.

Section 737 provides remedies for an investor.

Related sections

• s 715 — Contents of offer information statement
• s 715A — Presentation etc. of disclosure documents
• s 716 — Disclosure document date and consents
• s 718 — Lodging of disclosure document
• s 719 — Lodging supplementary or replacement document—general
• s 719A — Lodging supplementary or replacement document—2‑part simple corporate bonds prospectus

Research how courts apply s 717

BriefBridge searches Australian caselaw by meaning — every answer cited to the paragraph.