Larry King started a business in the early 2000s involving manufacturing and direct marketing of fitness equipment. He operated through a proprietary company, Larry King Pty Ltd. The business was quite successful, aided apparently by a media campaign featuring Larry himself. In 2019 Larry decided to dramatically expand the business and to change the operation from direct marketing to distribution of products through various retail outlets. For that purpose, he converted the proprietary company into a public company Larry King Ltd. He now wants to raise $12million in additional funds to assist with the expansion. One option that is being considered is to offer shares in Larry King Ltd to a number of institutional investors. An alternative option is to 'float' the business, that is, offer the shares to the public and apply for listing on the Australia Stock Exchange. Larry is very upbeat about the company's prospects. He believes that with the current health and economic conditions the company will double in size within a year. He approaches you and asks you to advise him on the following matters:

1) What are the implications under Chapter 6D of the Corporations Act of the two fundraising options being considered?

2) If a decision is made to carry out a float and seek listing on the ASX, what type of disclosure document will be required and what type of information must it contain?

3) If the offer document includes forecast consistent with Larry's view concerning the prospects of the company, are there any precautions in relation to disclosure that Larry, the board of directors and the advisers should take?

Australian Law