Legislative Thinking On Private Equity Investment Found Of Organizational Forms In China

As the subject of private equity investment, the private equity investment found determines the success of investment by way of its operation efficiency which however relies on the organizational form and institutional arrangement of an institution. Thus, design and construct such an institution that meets the practical needs of China while leverages the best has became the common problem of both theory and practical circles. So far, there are generally three organization forms of private equity investment fund, including corporate form, limited partnership and trusteeship. The operational efficiency of the three organization forms are different due to the different institutional arrangement. Based on the legal background of China, the specifications of private equity fund investment and the theories of legal organization forms, this thesis studies the three organizational forms mentioned above from the point of view of legislation, and concludes that organization of private equity investment fund must meet the practical needs of a country, and any indiscriminate imitation of other countries cannot be advisable. The three forms above, i.e. corporate form, limited partnership and trusteeship all have the basis of law in China; they will be applied and shall prevail in China as long as the arrangement of law, policies and regulatory system in China in favor of their roles in the private equity investment fund market. Presently, China has corresponding legislations on the three forms of corporate form, limited partnership and trusteeship, and the above three forms all have been used in the practical level. Hence, as long as the corresponding legislation and regulations meet the needs of practice, the three above forms could be adopted in private equity investment fund of China.