Study On The Application Of Family Trust In CG

In January2013, the first domestic family trust was successfully issued, marking thetransition of Chinese traditional trust business, playing a significant impact on thedevelopment and innovation of trust industry in China. On one hand, it provides a new wayof thinking about divorce and inheritance disputes exited for a long time in Chinese privateenterprises; on the other hand, corporate governance structure can be improved effectivelyby the trust, which provides a favorable system to create "century-old shop".Firstly,this paper reviews the related basic theory including principal-agent theory,stakeholder theory, incentive theory and corporate governance theory. and the family trustmarket Secondly, it explains the development status and characteristics of family trustmarket. Thirdly, it focus on the case of "Wu Yajun divorce". In this case,it introduces equitystructure, operating condition, equity segmentation dilemma and other aspects of LonghuReal Estate Company created by Wu Yajun, followed by analysis of separation of thefamily property trust.Next, the case discuses the effective function of this trust in thecorporate governance.It can be concluded that the performance in the application has great impact of family truston corporate governance. In order to establish family trust tailored,this paper explores howto combine the development of family enterprise and the predicament in governance toestablish a modern corporate governance mechanism beneficially, together with the relatedequity and interest of the family members guaranteed.