On the last parliamentary sitting day of the year, Assistant Minister to the Treasurer Alex Hawke presented the crowdfunding legislation to Parliament on behalf of Assistant Treasurer Kelly O'Dwyer.

The Corporations Amendment (Crowd-sourced Funding) Bill 2015 "has the potential to provide finance for innovative business ideas and additional investment opportunities for retail investors", the bill's explanatory memorandum stated.

The proposed legislation would establish a regulatory framework to facilitate "crowd-sourced funding" (CSF) by small, unlisted companies.

The CSF regime would include: eligibility requirements for a company to fundraise via CSF, including disclosure requirements for CSF offers; obligations of a CSF intermediary in facilitating CSF offers; the process for making CSF offers; rules relating to defective disclosure as part of a CSF offer; and investor protection provisions.

A statement by Ms O'Dwyer said the introduction of the legislation marks a "key priority of the Turnbull Government’s National Innovation and Science Agenda".

"Following extensive consultation, the legislation will allow unlisted public companies with less than $5 million in assets and less than $5 million in annual turnover to raise up to $5 million in funds in any 12-month period," she said.

"Companies that become an unlisted company in order to access crowd-sourced equity funding will receive a holiday of up to five years from some reporting and governance requirements." 

Companies that raise capital through crowdfunding would still be required to release an offer document, Ms O'Dwyer said.

"While investors will be able to invest an unlimited sum in crowdfunding, there will be a cap of $10,000 per issuer per 12-month period to ensure that mum and dad investors are not exposed to excessive risks," she said.

"Australia’s CSF model is competitive globally with the issuer cap of $5 million each year higher than the US and New Zealand cap, and the investor cap of $10,000 per issuance higher than the average in New Zealand and the UK."

The government will also consult on options to facilitate crowdsourced debt funding in 2016, said Ms O'Dwyer.

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