Unlisted Equity Financing Of Private Enterprises

With the revolution deepening, folk corporations in our country have gradually finished their primitive accumulation and come into being important economic micro-entities of economic development in our country. But at present internationalization and quick growth of folk corporations face a serious financing hot water. Many starting and growing medium-small folk corporations have limited financing channels and it is hard for them to get the money in time they require. Folk corporation' s capital structure mainly in domestic financing and indirect financing badly restrict the folk corporation' s further growing , so exploring a new financing way that fit folk corporations is necessary and timely.At first through analysis of folk corporation' s present financing situation, this paper indicates that equity financing is a necessary financing mode for non-stock folk corporations. Folk corporations' financing in the process of beginning and growing characterizes disaccord risk order and unbalanced information, and without credit record and enough collateral assets available, it is very difficult for folk corporations to obtain loan from banks and to issue bonds. Folk corporations could depend on personal and relative capital at the beginning, but with the development of corporations, financial shortfall would become bigger and they must widen financing channel and broaden capital source, such as introducing risk and stratagem investment and etc. Equity financing could effectively resolve two big problems, risk-profit disaccord and unbalanced information between entrusting party and representing party.Then, this thesis deeply studies a series of problems that would be met in the course of equity capital transaction. The problems include whether non-stock folk corporations can transfer equity capital legally, whether equity capital transaction have to be approved by Stock Inspection Commission, whether higher-price transaction and dividing capital stock transaction are legal and where equity capital transaction is done legally and safely. Besides, this paper relatively completely analyzes the phenomenon that folk corporations go abroad to enter foreign stock exchange and individuals invest equity capital of folk corporations that are going to enter foreign stock exchange.