The Research On Private Equity Investment Trust Contract

In recent years, the private equity investment trust market develops rapidly in China so that each large-scale trust company engages in business of private equity investment trust; simultaneously, the infringement of investors’ interests occurs in the practical transaction. Therefore, it is necessary to analyze the legal attribute of private equity investment trust, and dissert the legal relationship of trust between the investors and beneficiary, credit relationship between the beneficiary and trust company, and the legal presentation relationship between the investors and beneficiary. Based on these legal relationships, the system function of private equity investment trust contract are expressed in lowering the transaction cost, defining the right and obligation relationships among parties of trust investment contract, ensuring wealth accruement, and guaranteeing investors’ equity. In comparison with the conclusion of other commercial trust contracts, the private equity investment trust owns its particularity in offer invitation, agreement contents, and contract forms; in addition, it has a more complex concluding procedure. A study on the concluding procedure of private equity investment trust contract aids to analyze each signing step from the viewpoint of legal theory, abstract the legal rule from the general commercial actions, and fill a gap in studying the private equity investment trust contract. The investors and trust company are two important contracting parties in the private equity investment trust contract, and their high qualifications are required for the practice of private equity investment trust. In rights and obligation, the investors enjoy a checking right, claim for preferential profit sharing, right to assign dividends, right of transfer, right of claim of redeem and right of claim of liquidation, etc., and also undertake corresponding obligations; the trust company has the rights to acquire commission and management fee, and to execute the stockholder’s right, etc., and should bear the obligations in goodness management and faith operation. By analyzing the types of rights and obligation of investors and trust company, it will be helpful to settle the benefit conflicts among parties of private equity investment trust contract, which may equalize the equity of parties. According to the theory of trust law, the investors entrust their cashes to the trust company for investment in stock of non-listed companies or restricted shares of listed companies, and the investors do not dispose of trust fund themselves. During the execution of trust contract, the trust company is likely to misconduct the trust obligation, including fails to goodness management and faith operation, and shall assume corresponding civil liability for investors’ trust interest damage incurred thereupon.