Private Equity Funds In China Legal System

Private Equity Fund (referred to as PE), PE as an efficient tool for the investment in innovation, rapid development in the global scope in the 1980s. China private equity fund derived from outside the private-equity funds, because the indefinite needs of business guide fund to development and prosperity of the GEM in 2009. A local venture investment funds invested enterprises have been successfully listed, local private equity fund investors and managers have achieved great wealth. Rapidly growth of private equity funds invoke endless trial and error, torture to lawmakers wisdom. Currently, regulations about private-equity funds almost referring to the relevant provisions of the various ministries, not only deficient in academic level of cognitive, but also scattered in market experience. Based on this, the paper from the perspective of comparative analysis with private-equity funds, choose a topic to improve the legal system, using the backwardness advantage from legislation of China's capital market, combining the characteristics of deep thinking, trying to improve China's private equity fund legal framework.There are five chapters in this paper except the introduction and conclusion. Review separately from the Private equity fund in China, An overview of the system of private equity fund forms of path selection, Private equity fund subject appropriate regulation, Private equity funds invest in Valuation adjustment mechanism, China private equity fund limited supervision system of stereotype respectively.The first chapter observe the equity funds from the connotation of the concept of investment funds in the framework, and reveals the essential attribute of trust system, private equity fund of responsibility and interests of separation, the fund property independence and highly Lutheran relationship. Based on the the unique differences in externality of private equity funds, divide into three types, such as encourage, passive supervision and active supervision category private equity funds. On this basis, we research the United States, Britain and Japan private-equity funds, and explore the development history and trend in the development of the system of law, this observation is not only look back, but also is the experience. We found that private equity funds developed to multiple types from single type, the government offer different regulation for different types of private equity funds, and various types of private equity funds are not exist in the difference of absolute sole boundary. Based on this, we can observe the in private equity funds to the local regulation differences and possible future improvement path.The second chapter to reveal the legislation form of organization as a kind of private equity funds available for investors to choose. From four perspectives to review, such as control allocation, investment perspective view, long-term incentives - game - reputation mechanism perspective, tax - operating cost for companies, trust perspective and limited partnership of private equity funds. The author is not confined to the list of comparative observation, but aims to further research from the function of private equity funds history and experience to review and explain why private equity fund forms is different from general enterprise, and shows adverse selection of development path, why countries private equity fund forms showing a unified model from the company limited partnership to compact, especially the gradual change of equity funds, and analyze the model private-equity funds in China, analyzes the cause of the weakening of the trust of the alienation of private equity funds. Finally detailed analysis the private equity investment limited partnership fund how to become a leading private equity fund in the form of organization, limited partnership of private equity fund investment decision-making and profit distribution system of our country.This paper give four approaches propose from the failure case (East of Wen Zhou private equity funds limited partnership), such as Establish general partner obligation, Clear the unlimited liability paths, Establish an effective mechanism of reputation. The third chapter aim at observe private-equity funds three main investor, such as qualified investors, the administrator, the trustee and legal appropriate regulatory issues. Private equity funds are very different from ordinary financial goods investment activities. Based on this point, the author studies discriminatory risk investment demand from investors with the government supervision of the category of thinking review, and qualified investors powers adopted dynamic net asset scale standards, and give our existing static capital line scale to design qualification of investors admittance threshold; For about the manager in private-equity, this paper compared the regulation of liberal and limit the countries legislative model based on the arrangement of localization in China, points out that the reform thought of limited pattern, emphasize the professional managers and dynamic assessment of the quality of credit. We study form the role of trustee when we research the standard for the custodian, and review the relevant qualifications and the independence of the standard, finally based on the feasibility of the localization plan.The fourth chapter focus private-equity funds in a realistic topic is controversial agreement from Valuation adjustment mechanism, we study form the legal construction of explaining its essence, we believe it is a kind of the invested enterprise value valuations which have some differences in conditional arrangement, discusses the academic level in the legal attribute of the agreement with the legitimacy foundation, and put forward the ideas that it is has shoot contract attributes. On this basis, the author standing in the balance of interests, from the perspective of the agreement with investors had financing interchange position, review multiple perspectives and believe that we should weigh it carefully in practice.The fifth chapter to review the the boundaries between government and market of private-equity funds in the process, and make category of limited supervision to different kinds of private equity funds, such as not listed smes equity investment fund, Government funds, Private equity securities investment fund. Finally this papers puts forward some ideas of market regulation measures and methods.