Research On The Standard For Judging Related Party Transactions Of Companies Making IPO In China

It's a widespread phenomenon that companies conduct related party transactions during the course of initial public offering of securities.They make transactions more efficient,while there are risks of damages to the interests of stakeholders.It is likely that related parties may invade the interests of the issuer and stakeholders by related party transactions.Therefore it is of significance for regulation of related party transactions.The legal system governing the related party transactions has a lot of recognition®ulation norms,whereas the discrepancy and the disorder of legal norms which regulates related party transactions lead to the complexity of the standard.Existing identification system has some problems in the circumspection of concept,lack of principles and maneuverability etc.In this paper,based on the study of norms on identification and regulation of related party transactions conducted by issuers,and deep analysis of China's current legal systems regulating related party transactions of issuers,I come up with the judging standard of related party transactions conducted by the issuer combined with the ideal regulatory model.In the IPO process,the judging of related party transactions consists of the identification of parties and the recognition of behaviors.The first step is to make preliminary identification of the party to the transactions.On this basis,it may fall in specific types of related parties in accordance with the appropriate procedures and rules.If the party to the transactions can be recognized as related party of the issuer,the next step is to determine whether the behavior meets the meaning of related party transactions.Should the behavior meet the implication,the next step is to identify whether it is excluded from the scope of regulation of related party transactions.If not,it can be regarded as related party transactions.Finally,in accordance with the arm's length principle,it can be determined whether it is fair or not.Chapter 1 analyzes the basic problems regarding related parties and related party transactions.At first,the significance and complexity of the judging and regulation during the course of initial public offering of related parties and related party transactions are addressed.Later,after a review of advantages and disadvantages of judging and regulation system of foreign jurisdictions,the paper state the possible reference in China.Chapter 2 discusses the state of practice of related parties and related party transactions in the initial public offering.First,through the analysis of Alibaba IPO structure,China's current disjointed states of legal norms and practices are discussed.Secondly,our current norms and regulations identified related parties and related party transactions are reviewed.Finally,based on the analysis of the identification and regulation of related party and related party transactions,I propose a suitable judging and regulation mode.Chapter 3 introduces the of the judging standard of affiliated parties.At first,the judging principles are given in accordance with the regulation mode.Secondly,direct pattern is chosen to judge whether it is affiliated party.Third,the core elements of affiliated party are controlling relationship and significance influence relationship.Finally,the affiliated parties are divided into five specific categories and the corresponding judging procedures are discussed.Chapter 4 deals with the standard judging related party transactions of the issuer.First,the meanings of transactions and related party transactions are stated.Secondly,the judging point and system of related party transactions are discussed.Finally,based on the elaboration of different types of related party transactions,we can regard them as related party transactions as long as they are not excluded from the regulation of related party transactions.And then,the principle of arm's length transactions is chosen to determine the fairness of related party transactions.