The Research Of Private Equity Funds Involved In Corporate Governance By Law

Private equity funds have a rapid development in our country recently. It learnsfrom other country’s advanced experience of the process, is also showing the localdevelopment of unique track. And because the local legal environment barriers, someinternational common terms didn’t directly in practice for China. So discusses how toconstruct Chinese Private Equity Funds Involved in Corporate Governance legalsystem design is quite realistic. At present, domestic literature focuses mainly onprivate operation process itself, and from the legal perspective of private operation ofthe books is less.This article from the private equity investment fund in our country legal regulationabout the path of evolution, through combing the historical context, in order to find thepossible future regulatory direction. Analysis of the legal environment in our country,private trust, corporation, limited partnership funds in the practice of their respectiveadvantages and disadvantages. The trust private equity investment funds, because theactual investor and manager of principal-agent relationship, being voted the IPO, maybe the SFC equity definition: incomplete disclosure or information not overruleapproval. At present, the establishment of private equity investment fund of themainstream is still the company business. However, there are some shortcomings in thecompany system: first, there may be a dual taxation problem. Second, investors asshareholders, have the right to participate in the company management, have the rightto attend the shareholders’ representative assembly act vote, it would obviously beinterference management of professional investment behavior, once in the interests ofthe dispute is not easy to divide their respective responsibilities.In the third part of this paper, through the analysis of cases form, for all of usshowed private equity funds depth participate in Corporate Governance motivation andmethod, and they have a profound influence on the company. This case around2010year, before and after the28th September "Gome electrical appliances Huang-Chen equity struggle", detailed shows the Bain capital participating in Gome CorporateGovernance by use some private terms in the list: Board seats reserved, gambling onthe agreement, convertible bonds.The fourth part is a detailed analysis of the term sheet of equity investment ofUnited States in Chinese law environment.Because from the Anglo-Americanagreement in terms of autonomy is strong, and the law of our country environment isnot completely compatible. Most of the articles directly applicable still exists manylegal obstacles such as: industry common agreement on gambling, anti-dilutionprovision, convertible debt. Nov,2011. Gansu province high court appeared firstdomestic judgments" agreement on gambling" invalid cases, one of the important basisis the" Supreme People’s Court on a number of joint venture contract dispute cases theanswer to the problem of" fourth:" next to the joint venture, is borrowing, in violationof the relevant financial laws and regulations, shall confirm the invalidity of thecontract." There is no doubt that a precedent landmark events, will become China’sprivate sector development process.Finally, on the analysis of China’s private equity industry existence of legalobstacles on the basis for the development of the industry, this paper puts forwardsome suggestions. Includes revised1990judicial interpretation issued, develop “Chinamodel legal documents for venture capital investments”, and to give full play to therole of industry associations and so on.