The Development And Legal Risk Research Of Equity-based Crowd-funding In China

At present,the traditional bank credit system is unable to satisfy the fund demand of entrepreneurs and medium,small and micro-sized enterprises,while the connecting channel between the private capital and the entity economy is exploited by the mode of equity-based crowdfunding to rationally allocate element resources in an effective way by means of the efficient information transmission platform-Internet.Although the mode of equity-based crowdfunding flourishes,there exist a few problems,which are reflected on the following aspects: 1.there is no applicable system control on financing activity of equity-based crowdfunding;2.the financing function of equity-based crowdfunding is not properly applied;3.commonsense knowledge on the content and nature of equity-based crowdfunding is insufficient among most people.Furthermore,the equity-based crowdfunding in China is in an unordered self-directed development state with huge legal risk and commercial crisis due to numerous negative factors such as absence of legal supervision,insufficiency of value application and deficiency of risk education.The main research content and conclusion in this paper include the following four parts:Part I: Basic mode of equity-based crowdfunding.First,concept introduction and type classification are carried out for crowdfunding;then,an in-depth analysis is made on main participants(project fundraiser,public investor and crowdfunding platform)of equity-based crowdfunding according to relevant provisions of Management Methods on Private Equity-Based Crowdfunding(Trial)and other related legal provisions;finally,a summery is made on the legal sense of equity-based crowdfunding to draw the conclusion.Part II: Analysis on status and problems of equity-based crowdfunding in China.The performance of equity-based crowdfunding in China is first introduced,then a series of legal risks in the mode of equity-based crowdfunding are analyzed,e.g.the industry is short of effective legal supervision and unified business regulations;investors suffer the risk of fraud in financing;operation of crowdfunding platform involves compliance risk and equity-based crowdfunding project relates to design infringement risk.Part III: Development and experience of equity-based crowdfunding in the international market.The development history and obstacles of equity-based crowdfunding in the international financial market is presented first,then an analysis is made on the attitude and practice on equity-based crowdfunding from various countries,and a prospect is finally carried on the development trend of equity-based crowdfunding in the international financial market.Part IV: Recommendations on construction of legal system on equity-based crowdfunding from China.Suggestions are introduced from realistic level and legal level.In terms of realistic level: proposing the risk prevention measures on equity-based crowdfunding investment and on design infringement of equity-based crowdfunding project;in terms of legal level: presenting to enhance the control on equity-based crowdfunding platform,improve the restriction and information disclosure on permitting qualification of investors,strengthen the supervision authority of relevant departments and the control & supervision on rate of return,etc..