Set up an excluded investment fund
Pool capital with a small group without registering a managed investment scheme.Registering a managed investment scheme is built for funds that offer themselves to the public, and the cost of it doesn’t shrink because your fund is small. A private group can often sit outside that regime instead. We test your structure against the exclusion, draft the constitution and the member agreements, and tell you what the fund still has to do once it is running. You get the pooling you wanted without the compliance load of a scheme you were never trying to be.
An exemption you can rely on
Your structure is tested against the exclusion before you take a cent, rather than after someone asks.
Documents your members can hold
Every investor has the constitution and the agreement that say what they own and how the fund runs.
A structure sized to the fund
You carry the compliance a small private fund actually needs, not the load a registered scheme would.
What is an excluded investment fund and who does it suit?
A managed investment scheme is, broadly, an arrangement where people contribute money to a common enterprise and someone else operates it. Schemes offered to the public generally have to be registered with ASIC, which brings a constitution, a compliance plan, an audit and ongoing reporting. The Corporations Act 2001 (Cth) (the Act) also sets out exclusions, and a fund with a small number of members that isn’t offered publicly can often rely on one. The exclusion suits family investment vehicles, closely held syndicates and small private groups, and it stops suiting them at the point the fund grows or starts being marketed.
What is an excluded investment fund?
It is a private investment vehicle that pools money but does not have to be registered with ASIC as a managed investment scheme, because it fits one of the exclusions in the Corporations Act. Those exclusions generally turn on how many members the fund has and whether it is offered to the public. It describes a fund that sits outside the regime, rather than a separate type of entity.
Who is an excluded investment fund suitable for?
Small groups who already know each other: family investment vehicles, closely held syndicates, and partners investing alongside a business they run together. It is not suitable for a fund that intends to grow past the threshold or to market itself, because growth of that kind is exactly what removes the exclusion.
What obligations apply once the fund is running?
Not being registered is not the same as having no obligations. The fund still has to keep proper financial records, account to its members, and operate the way its constitution says it will. We will set out what applies to your structure specifically, because it depends on the entity you use.
What documents do I need to establish one?
Usually a constitution or trust deed, a member investment agreement, and an information memorandum where the offer calls for one. The documents matter more in a small fund than people expect, because there is no registry or regulator standing behind the arrangement if members fall out later.
Not sure if your structure qualifies as an excluded fund?
The answer usually turns on how many members you expect, who they are, and how the opportunity is being put to them. Tell us those three things and we can say early whether the exclusion is available.
The exemption holds while the fund stays small, and growth is what tests it
You want a handful of people to invest alongside you, and the moment money is pooled and someone else manages it you are close to the definition of a managed investment scheme. The exclusions exist for exactly your situation, but they are thresholds rather than a category, and nothing tells you when you have crossed one. What you want to know is whether the structure you have described sits inside the line, and what would push it out.
- We will test your proposed structure against the exclusion and tell you plainly whether it holds.
- We will draft the fund constitution or trust deed and the member agreements.
- We will prepare an information memorandum where your offer needs one.
- We will set out the obligations the fund still carries once it is running.
The investors are ready. The structure is the part nobody has checked
You have found the opportunity and a small group who want in. Everyone is experienced, everyone knows each other, and the paperwork so far is an email thread and a spreadsheet. Someone has asked whether this needs to be registered with ASIC, and the honest answer is that nobody in the group knows. You would like to take the money this quarter rather than spend it on a registration you may not need.
What's included in your excluded investment fund service
- An assessment of your proposed structure against the exclusion requirements.
- Drafting of the fund constitution or trust deed.
- Member investment agreements.
- An information memorandum where the offer requires one.
- Advice on the obligations that continue once the fund is operating.
An unregistered scheme is not a problem a fund can fix quietly
The risk here isn’t that someone objects at the start. It is that the fund works. Members introduce friends, the group creeps past the threshold it was built for, and the exclusion the whole structure depended on stops applying without anyone deciding anything. Operating an unregistered scheme that should have been registered exposes the operator under the Act, and the remedies available include having the scheme wound up, which is the one outcome every member was investing to avoid. The documents tend to be the weakest part as well: a fund assembled on an email thread has no constitution to fall back on when two members disagree about what they were promised.
How we get the structure right before the money moves
We start by testing the facts against the exclusion rather than assuming it applies: how many members, who they are, how the opportunity is being offered, and who makes the investment decisions. If it holds, we draft the constitution or deed and the member agreements, so every investor has a document that says what they own, how the fund is run, and how they get out. If it doesn’t hold, you find that out now, while the options are still cheap. We also tell you what would break the exclusion later, so growing the fund becomes a decision rather than an accident.
Three steps to a fund that sits properly outside the regime
Test it, document it, then know what would break it.Test the exemption
We check the member numbers, the offer and the management arrangements against the exclusion, and tell you plainly whether it holds.
Draft the structure
We prepare the constitution or trust deed and the member agreements, so every investor holds a document that says what they own.
Open the fund
We complete the execution, set out the continuing obligations, and tell you what would push the fund back inside the regime.
A structure checked against the rule, not against what usually works
Groups like yours usually arrive having had the structure explained to them twice, in two different ways, by people who were both confident. The cost of being wrong about it isn’t obvious until it is.
We have 2 Accredited Specialists in Business Law, and we are ISO 9001 accredited, so the steps taken on your file and what you are told at each one are defined rather than improvised. On a fund like this the answer is rarely a judgement call about risk appetite: the exclusion either applies to your facts or it doesn’t, and what you are paying for is someone prepared to say which.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Ready to get the fund properly structured?
The exclusion either covers your fund or it doesn’t, and that is worth knowing before the first contribution lands. Tell us the shape of the group, and we will tell you where you stand.
More on this area of law
Read more about managed investment schemes, the registration exclusions and how small private investment funds are structured.