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Study Of The Legal Problems Of The Form Of Venture Capital Organizations In China

Posted on:2009-11-24Degree:MasterType:Thesis
Country:ChinaCandidate:X F LingFull Text:PDF
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Venture capital can be seen as a form of equity investment whose targets are emerging enterprises (mainly in emerging high-tech enterprises), which are still in the phase of the venture and have high growth potential to carry out long-term equity investment, with the aim of promoting the commercialization of new technology and achieving an investment return through the increment of capital of invested enterprises. With its characteristics of high risk and high yield, time limits, rights and interests and profession, venture capital is mainly divided into six stages, which is the emergence of trading activities, the filtration of investment opportunities, evaluation, construction, management risk after investment and the quit of investment.Venture capital originated in the United States and was flourished in the 1980s. After 20 years, it has become a quite mature and successful industry in the United States. Venture capital in China emerged in the 1980s. In 2006, China exceeded Britain and became the second largest destination for venture capital in the world.At present, the forms of organization of venture capital can be mainly divided into company, limited partnership, trust and contractual system. Limited partnership has been considered as one of the most efficient and appropriate form in the world.Corporate system is the most common form of organization, but its defects, which are legal restrictions of the number of shareholders, rigid payment of registered capital, double tax burden, cumbersome decision-making process, inflexible allocation, as well as the separation of investment risk and interests of fund manager, is not conducive to large-scale development of venture capital.By virtue of the flexibility in the payment of capital, the avoidance of double taxation, the efficiency of decision-making, flexibility of distribution and maximum of the proceeds of fund managers, limited partnership has become a favorite and new direction of venture capital in China.With regard to the elementary stage of venture capital that we are in now, both corporation and partnership governance has the necessity to exist, even though they have some defects. Therefore, in order to further adapt the development of venture capital in China, the author put forward some opinions about the improvement of taxation and the registered capital under corporation governance, the relaxation of the number of partners and participants and the definition of partnerships identity of shareholder in listed companies, also tries to design a strict agreement between venture investors and fund managers, with the aim of settling the management risk raised by the managers. The author also suggests making the Venture Capital Act in order to standardize the special Venture Capital.
Keywords/Search Tags:Venture Capital, Form of Organization, Corporate system, Limited Partnership
PDF Full Text Request
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