Legal Study On Internal Governance Of Limited Partnership Private Equity Fund

In recent years,Chinese private equity fund industry has developed rapidly,which has,to a certain extent,promoted the development of entity industry,especially high-tech enterprises.Limited partnership private equity funcd has become the most important form of private equity fund in our country because of its unique institutional advantages in organizational form,tax collection,exit channel and so on.At the same time,the problems of internal governance of the limited partnership private equity fund is increasingly prominent:the agency problem between the general partner and the limited partner is serious;The situation of the company acting as the general partner leads to the alienation of the internal governance of the limited partnership private equity fund;The dispute between the limited partner requires to parrticipate in the partnership affairs and the existing law stipulates that the limited partner may not carry out the partnership affairs;The contradiction between the requirement of better protecting the right to know and the right of supervision of limited partners and the narrow scope of "not regarded as limited partners to carry out partnership affairs' in the laws and regulations in force;The internal governance of limited partnership private equity fond is not perfect and so on.In order to improve the efficiency of internal governance of limited partnership private equity funds and reduce the agency costs between general partners and limited partners,many scholars began to study the internal governance of limited partnership private equity funds.This paper attempts to set out from two angles:the balance mechanism of rights and obligations between the general partner and the limited partner in the limited partnership private equity fund and the internal governance organization and its operating mechanism of the limited partnership private equity fund.In order to solve the problems of internal governance of limited partnership private equity fund,this paper analyzes the problems existing in the internal governance of limited partnership private equity funds,it also puts forward the legal path to construct and perfect mechanism of rights and obligations between general partners and limited partners and the internal governance institutions and their operating mechanisms of limited partnership private equity funds.This paper is divided into five parts.The first part mainly introduces the meaning,characteristics and core legal problems of the internal governance of limited partnership private equity funds.This part first expounds the connotation and institutional advantages of limited partnership private equity fund,and then expounds the meaning and characteristics of the internal governance of limited partnership private equity fund.In the end,the paper expounds the legislative status of the internal governance of the limited partnership private equity fund,the existing core problems and the core legal problems to be solved.The second part mainly elaborated the basic theory and the principle of the internal governance of the limited partnership private equity fund.This part firstly expounds the theoretical basis of the internal governance of the limited partnership private equity fund,including the contract theory and the principal-agent theory.Then it expounds the basic principles that should be followed in the internal governance of private equity funds of limited partnership,including the principle of combining autonomy governance with mandatory governance,the principle of balance of rights and constraints,the principle of taking the general partner as the center,and the principle of protecting the interests of limited partners.The third part expounds the incentive and restraint mechanism for the general partner in the limited partnership private equity fund.In this part,the incentive mechanism for the general partners are introduced,including management fee and income distribution mechanism.Then it expounds the restraint mechanism for the general partners and the suggestions to improve them,including the mandatory investment and loss sharing mechanism of the general partners and their key personnel,the promise of contribution capital system,the fiduciary obligations of the general partners,and the restriction of the company as a general partner.The fourth part expounds the protection and restriction mechanism for limited partner in limited partnership private equity fund.The protection mechanism includes the right to know,the right to make direct lawsuit and derivative lawsuit,and the right of limited partners to participate in the management of the fund.Then Some legal suggestions on how to improve the rights enjoyed by limited partners are put forward.The restriction mechanism mainly includes how to prohibit the limited partners from improper intervention in partnership affairs,and proposes to restrict the limited partners' excessive intervention in partnership affairs by referring to the "control rules" in the Uniform Limited Partnership Act of 1985 in the United States.The fifth part expounds the internal governance organization and its operating mechanism of the limited partnership private equity fund,including the meeting of partners,the meeting of investment policy committee and the meeting of limited partner,the nature and power of each internal governance institution.