A draft law "On Crowdfunding" was discussed today at a meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship, APA reports.
The draft law consists of 7 chapters and 23 articles and regulates the legal, organizational and economic foundations for the implementation of equity-based and debt-based crowdfunding in the Republic of Azerbaijan, the requirements for the activities of crowdfunding platform operators, as well as issues related to state regulation and supervision of their activities.
The purpose of the law is to provide economic entities, especially startups and micro, small and medium-sized enterprises, with convenient access to prompt and sustainable alternative financing channels through the use of information resources and systems, as well as the opportunities offered by the capital market, in order to increase their business activity, while ensuring the protection of the rights of investors participating in financing.
Debt-based crowdfunding is defined as crowdfunding that envisages raising funds through the purchase by investors of debt investment securities issued by a project owner for the purpose of financing a crowdfunding project under conditions established by law.
Crowdfunding is defined as the collective financing of a crowdfunding project through a crowdfunding platform for the purpose of raising funds from investors. A crowdfunding campaign is an announcement posted on the internet information resource of a crowdfunding platform for the purpose of collecting funds required to finance a crowdfunding project. A crowdfunding project is a proposal posted on a crowdfunding platform to attract funds in accordance with the procedure established by law. A crowdfunding agreement is a written agreement concluded between investors and a project owner through a crowdfunding platform.
Equity-based crowdfunding is defined as crowdfunding that envisages raising funds through the purchase by investors of shares in a project owner for the purpose of financing a crowdfunding project under conditions established by law.
The law will not apply to legal entities established by the state and the entities founded by them for the purpose of implementing the state's investment policy.
Relations related to crowdfunding in the Alat Free Economic Zone will be regulated in accordance with the requirements of the Law on the Alat Free Economic Zone.
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