Research On Legal System Of Exit Of Private Equity Fund In China

Private equity fund operations are continuous activities forming by financing、investing、managing and exiting, and the exit of private equity funds (PE) is quite significant during thewhole operation process of PE. When private equity funds can be smoothly exited frominvestment projects, the capital appreciation can be achieved and the exit of PE requiressound legal system. The PE industry in China started later, so the legal system regulating PEis not sound now and it can’t ensure the exit of private equity funds, which greatly influencesdevelopment of the private-equity industry. This paper, through the following four aspectsand discussing the legal system of the exit of private equity funds in China, offer suggestionsfor perfecting our legal system of the exit of private equity funds in China, in order topromote private equity fund can be successfully exited form the investment and thedevelopment of the private-equity industry in China.The first part, it introduces the essence of PE and its exiting. It first points out theconcept and characteristics of PE, and then reaches a conclusion that the exit is important andnecessary by elaborating the operation process of PE, and introduces the concept andcharacteristics of the exit of PE.The second part, it mainly discusses the four exit channels of PE, which are Initial Publicoffering exit, Mergers and acquisition exit, Shares Buy-back exit and Write-off exit. Then,concepts、types and the advantages and disadvantages of each exit channel are discussed,which establishes a theoretical foundation for what follows in the passage.The third part, it mainly investigates the legal system design of exit of PE in the UnitedStates. The most development of PE in The United States greatly depends on its sound legalsystem. Through to compare the legal system design of exit of PE in the United States,providing reference for the perfection of legal system of exit of PE in China.The fourth part, it is the part on which the article lays emphasis, and mainly discusses thepresent situation and the perfection of relevant legal system of exit of PE in China. It firstsummarizes the current legal system environment of exit of Chinese PE，and then analyses legislation and legal obstacles of Chinese PE in the four exit channels now. At last, advicesfor improving related legal system for the exit of PE in China are envisaged.