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If you’re a startup or small business, it’s likely that you’ve heard of crowd-sourced funding (CSF). It remains a popular method to raise money in the early stages of your business journey, helping you hit the ground running in 2025.
However, CSF can also influence how you conduct business activities further down the track. Since you’ll be tied to a diverse group of investors, you may need to secure their approval for several key decisions.
What Is Crowd-Sourced Funding?
CSF is a way for startups to raise small amounts of capital from a large number of investors. In 2025, this method continues to be popular due to the flexibility it offers in selecting investors from the so‐called ‘crowd’. Moreover, these investors typically receive some ownership or equity in the company, which means you have a duty to manage these relationships carefully.
It’s essential to recognise that as shareholders, these investors have rights and expectations. A robust CSF Company Constitution is a great way to streamline these obligations and minimise potential disputes (we’ll cover this shortly).
Laws Around CSF
If you’re engaging in CSF, it’s vital to be aware of the latest legal framework in 2025. ASIC continues to provide detailed guidance on these matters, ensuring that the regulations are clear and up-to-date. You can find comprehensive information on the relevant laws here.
The main pieces of legislation to familiarise yourself with are:
- Corporations Amendment (Crowd-sourced Funding) Act 2017 – still the cornerstone legislation for CSF.
- Corporations Amendment (Crowd-sourced Funding) Regulations 2017
What Does A Company Constitution Cover?
A company constitution typically sets out the key rules for members, directors, the company secretary and other stakeholders. It outlines the rights and duties of each party, helping to maintain clarity in decision-making. In 2025, it’s also important that your constitution addresses modern digital transactions and dispute resolution methods, reflecting current business practices.
Every member agrees to these terms, as they form the binding framework of your company’s operations. Usually, the constitution comes into effect once a special resolution has been passed.
Why Do I Need A Company Constitution For CSF?
When you raise capital through CSF, you’re effectively bringing new shareholders on board. This means you owe them certain obligations, which might include requiring their approval for changes to your shareholders agreement or obtaining accession deeds from each investor.
Having the right Company Constitution in place can eliminate these headaches by clearly outlining the rules and procedures for decision-making. It not only streamlines your operations but also helps protect your interests and maintain smooth relationships with your investors.
Looking ahead in 2025, many startups are refining their legal frameworks to reflect the evolving landscape of CSF. Enhanced investor rights, digital compliance measures, and explicit voting provisions are now more common, providing greater transparency and efficiency in managing shareholder relations. For further insights into how these regulations affect your business, our guide on Does Business Structure Matter? and What Regulations Affect Your Corporation offer valuable guidance.
Next Steps
Sprintlaw is ready to help you draft a CSF Company Constitution tailored to your business’s requirements. We work closely with you to ensure that it not only complies with current 2025 regulations but also protects your business relationships and streamlines decision-making.
Our package includes phone consultations with one of our expert lawyers, who can advise you on all relevant legal issues. Additionally, we offer a complimentary amendment to the final draft, ensuring that your constitution remains robust and up-to-date. For more comprehensive support, consider our contract review and redraft service if you need further adjustments.
If you would like a consultation on your options moving forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligation chat.
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