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Foreign Venture Capital Fund Legal Issues

Posted on:2005-10-20Degree:MasterType:Thesis
Country:ChinaCandidate:M LiaoFull Text:PDF
GTID:2206360125951901Subject:International Economic Law
Abstract/Summary:PDF Full Text Request
Venture capital is considered as the engine of the new economy and could stimulate the high and new technology greatly. For this reason, venture capital has been paid much attention. Venture capital has been introduced into china since the 1990's. But it developed slowly for the following reasons: one is the economical factor; the other is the political and legal barrier, which arises scholar's attention widely. Since china has been a member of WTO, capital market has been opened to foreign investment gradually and the construction of capital market of different level is under the way. Venture capital has become a new form for introducing foreign capital. Different from the indirect investment and general manufacturing investment, specialty of the venture capital should be taking into consideration for this form. Therefore, this article intends to discuss the relevant legal problems about foreign investments venture capital fund.This article includes the text, which includes four parts, introduction and conclusion. It organized by 35 thousand words. Firstly, it analyzes some conceptions about foreign investments venture capital fund and trace it's history with the way of legal economy analysis and comparison., it goes a step further to analyzes forms of foreign investments venture capital fund; then it presents the legal problems of establishment and operation of the foreign invested venture capital fund in china and puts forward the legal suggestions; finally it analyzes the conflicts between the exit mechanism of the foreign investments venture capital fund and Chinese law, then put forward the legal suggestions to perfect the exit mechanism.The introduction simply introduces the aim of the article and the author's thought.The first part-institution origin. Venture capital is an investment form,whose aim is to market the new technology as soon as possible and get more capital return. The history of venture capital shows venture capital fund comes from two factors: one is the demand for the outside capital; the other is more capital return brought by this kind of organism. The establishment of foreign investments venture capital fund contributes to the introduction of the foreign advanced management experience, market network and intelligence support, while there are still difficulties and legal barriers.The second part-the organization form of foreign investments ventures funds. It firstly analyzes the institution economy nature, concludes that four factors should be take into account for the organization form: attraction for the capital; individual and common obligation of the debt; the incentives and inspection; operational costs. Then two main forms in different countries are compared; namely limited partnership and cooperation. After that, it gets the conclusion: limited partnership is not the best organization form of venture capital fund as most scholars considered the advantage of the limited partnership is the tax preference. Since china has not stipulated limited partnership in partnership law, the article puts forwards some legal suggestions.The third part-the legal problems in the establishment and operation of the foreign investments venture capital fund. It analyses four points in accordance with the supervision rule to the foreign investment venture capital enterprise. The first one is that too much capital investment is required for the establishment. The second is that the credit and the guarantee are prohibited. The third is that the tax preference hasn't been realized. The forth is the lack of "the principle and promise capital" and "divorce principle without fault" for above problems. It comes up with some legal suggestionsThe forth part-the exit of foreign investments venture capital fund. The exit mechanism includes mainly three forms, namely: IPO, sharetransference, and bankruptcy liquidation. To establish the venture capital board, thought should be refreshed. For the share transference, the property right market should be constructed. As for bankruptcy liquidation, some rul...
Keywords/Search Tags:Foreign
PDF Full Text Request
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