China Reverse Merger Legal Issues Discussed

Reverse merger is a special merger mode, allowing a parental company to go public by being purchased by its subsidiary which is already listed. It grows with the emergency, development and improvement of China's securities market. Listing through reverse merger is becoming the financing channel for non-listed companies.Meanwhile, China's regulatory authorities are making the legal system more perfect. The system, comprised by laws, regulations and rules, makes reverse merger have laws to follow.This thesis describes the legislative and practical experience of reverse merger in USA. Based on China's current legal system, it also analyzes the issues in China's reverse acquisitions at the current status, in particular on qualification, related party transactions, equity acquisition of a listed company and etc. As a conclusion, the corresponding legislative suggestions are proposed.