Research On The Legal Supervision System Of Private Financing In China

With the occurrence of various private financing cases, including the case that Sun Dawu absorbed public deposit illegally in late2003, that Wu Ying of Intercol Group Limited conducted illegal fund-raising in2011, that the successive "run-away"events occurred in Wenzhou City, and that the financial reform areas were set up in Wenzhou on March28,2012, the private financing of small and micro businesses has attracted the attention of scholars and media from various circles and become the focus of the public. The number of search on Baidu and Microblog with the key words of Sun Dawu, Wu Ying and Run-away has increased to tens of thousands. Facing the discussion of the public, what is more important is to find out the deep reasons of these cases. It is the issue of small and micro businesses’private financing that these cases has exposed, and these cases also reflected the main problems existing in legal supervision on that. What kind of private financing is legal? What is the role played by private financing in the development of small and micro businesses? Who should be responsible for the illegal private financing and how to control it? An increasing number of problems in private financing of small and micro businesses because of their defects and legal deficiency have affected the steady economic development in China, and become urgent problems.This paper will conduct a study on constructing legal supervision system on the small and micro businesses’private financing in our country from the following four perspective. The first part is a general analysis on legal supervising issues in small and micro businesses’private financing, in which the concept and characteristics will be analyzed firstly to define the specific concepts adopted in this paper, and then introduces the current situation of small and micro businesses and private financing.The second part is about the major problems existing in legal supervision in small and micro businesses’ private financing in our country. The problems will be analyzed in detail form five aspects including the shortage of local supervision on private financing, illegalization on lending regulations, the vague legal boundary between private financing and illegal financing, the constantly increasing interest rate of financing, and the inadequacy of informal financing regulation. The third part is about the legal supervision system in related countries and regions’ private financing of small and micro businesses’ private financing. In this part the systems in US, India, UK and Hong Kong will be introduced briefly so that to conclude some advanced experience and lessons for our country. The fourth part is relating to some recommendations to perfect legal supervising system on small and micro businesses’ private financing. The recommendations are concluded through analyzing the situation and major problems in the present legal supervising system and learning the advanced experience from related countries. The construction of legal supervising system in private financing of small and micro businesses in our country should be conducted from the following four aspects:standardizing and legalizing private financing actions, defining a clear boundaries between private financing and illegal fund-raising, reducing the interest rate of financing and establishing interest rate supervising system and perfecting local financial managerial system.