On The Legal Control Of Equity Capital Contribution

Equity contribution as a new form of funding, because of its nature, has theadvantages which other investors can not compare, but there is a huge potential risk.Inthis paper, a Case as a starting point, then the writer analyses the concept of equitycontribution, the legal nature of the concepts and equity investment, the equitycontribution of the potential risks and control the issues legal.The first part of the presentation of the case are described, the idea of writing thisarticle from the case leads.The second part of the equity contribution of the fundamental issues wereexplained, describes what is equity and equity contribution funded characteristics, thenturn financed with equity transfer and equity investments were transferreddiscrimination, but also on the legal nature of the final equity contribution will beelaborated for the future risk of equity invested in practice problems andcountermeasures discussed in paving the way.The third part introduces the equity contribution of the potential risks, such as thevolatility of the equity capital of the three principles of risk to the enterprise, the equitycontribution is also prone to abuse of control, concluded that the risk of defects equityfinanced.The fourth part of the potential risks of the proposed equity contribution on the partexists for this part of the proposed measures to reduce the risk associated with equityfinanced. The first is to improve equity contribution assessment system, and thecombination of the newly revised "Company Law" on the verification systemintroduced briefly. Secondly, to prevent the transition of control associated with theenterprise, because our country does not make the relevant provisions, it is necessary tolearn from Taiwan’s legislature to reduce the risk of equity contribution brings. Again,flaws equity contribution made to improve the responsibility system, combined with"Company Law" to explain the three provisions were elaborated.