The Study Of The Legislative Construction Of Equity Crowdfunding In China

As a new kind of Internet financial mode, the equity crowdfunding has the character of wide audience and low cost. It has developed rapidly in recent years both in China and abroad. It becomes the emerging power of the capital market gradually. Short development history of equity crowdfunding has proved that it plays an important role in reducing the financing cost, easing the financing difficulties of small enterprises, broadening the investment channels and improving the multi-level capital market. But the equity crowdfunding goes beyond the legal structure and regulatory framework of the traditional financing model in our country, so it is still in the legal limbo. At present, the countries which have mature capital market recognize that the equity crowdfunding is an useful way for the small enterprises to raise capital so they issue the relevant laws and regulations. Our country should realize that the equity crowdfunding plays an import role in the multi-level capital market and acknowledge its legal status. Moreover, we should issue the laws to solve the realistic difficulties of the equity crowdfunding. This essay is based on this idea and it mainly includes four parts.The first part pays attention to the basic theory of the equity crowdfunding. It introduces the meaning of the equity crowdfunding, the major participants and the development situation both in China and abroad. It especially analyses the equity crowdfunding’s effcet of alleviating the financing difficulties of small enterprises, broadening the investment channels and improving the multi-level capital market. It sets the basis for the further demonstration.The second part pays attention to the legal inspection of the equity crowdfunding. It introduces the operation mechanism of the equity crowdfunding in our country. According to its operation mechanism, the equity crowdfunding equals to the public issue of securities. Legally, the financiers are the publishers. The crowdfunding platforms are the stock brokers.The third part pays attention to the analysis of the realistic difficulties of the equity crowdfunding. As an innovation Internet financial model, the equity crowdfunding is in conflict with company law, securities law and criminal law, so the crowdfunding platforms take various measures to avoid legal risk, which restrains the equity crowdfunding’s development. Because of its short history, the equity crowdfunding’s operation is not perfect. It is in the risk of credit fraud, intellectual property, and so on. In addition, the equity crowdfunding is in expansion phase, so its rights and obligations are vague. It is unfavorable to protect the interests of investors because of the short of information disclosure.The forth part pays attention to the assumption of the legislation model building of the equity crowdfunding. The legislation model building should seek a balance between capital formationg and investor protection. It should not only ease the financing difficulties of small enterprises, but also protect the interests of the investors. In practical terms, the legislation should acknowledge the equity crowdfunding’s legal status because of the exemption of direct public offering. To solve the realistic difficulties of the equity crowdfunding, the legislation should do something in the aspects of market access, risk prevention, information disclosure and so on.