The Legal Issues Of China’s Private Equity Fund Exit Mechanism

Private equity funds in China is gradually on the rise in recent years, in the case of little company’s financing is increasingly difficult to provide new financing channels. Exit of capital is an important part of the entire operation of the private equity fund, often determines the success or failure of the private equity fund. However, private equity funds, is still very short development time in our country, both in terms of market mechanisms and legal norms still have many defects. Especially private equity funds in China has not yet formed a sound legal system, So, it is very important to improve the legal system of capital exit.This paper analyzes the relevant legal system of private equity funds to exit.there are four parts:The first part, first defined the concept of private equity funds and private equity funds to exit, and then focuses on the private equity funds to exit in four ways:listed on exit, mergers and acquisitions, the repo and liquidation.The second part, analysis of legal barriers to private equity funds in China The listed, the Main Board and Growth Enterprise Market listing standards is too high, and the lock-up period is too long. M&A exit, China unified property right trading institutions, trading of property rights law is not perfect, Share repurchase, China has adopted the principle of "principle, prohibited, exceptions allow greatly limit the repurchase of private equity funds to exit and in liquidation, Require a higher liquidation bankruptcy liquidation and dissolution and liquidation of the eligibility criteria.The third part, Introduce the relevant laws and regulations of foreign private equity funds to exit. First analysis of the law of the United States in four exit way, followed by analysis of the German law in M&A exit and repurchase exit,then research the development and changes in equity buy-back system in Japan, after analysis of the law of the United Kingdom and Hong Kong GEM, and finally derived by summing up the Enlightenment to China. In the end,, according to China’s private equity funds and the combination of foreign law, proposed perfect private equity funds to exit the system legal advice of China.