(1) Party B (the target enterprise) and Party C (the actual controller of the target enterprise) promise that:

(1) The audited main net profit of Party B in 20 1 1 is not less than RMB 50 million;

(2) The application materials submitted by Party B to the China Securities Regulatory Commission and the business plan provided to Party A (investors) are not significantly different from the actual situation of Party B or are significantly concealed;

(3) Without the consent of Party A, Party B shall not unilaterally stop or suspend listing.

If any of the above commitments is violated, especially if Party B fails to be listed on the domestic stock exchange before 20 13 12 3 1, Party A has the right to ask Party B or Party C to buy back the shares of Party B held by Party A, and the repurchase price is composed of Party A's investment and interest, and the interest is calculated at the annual interest rate of 20%. The calculation formula of repurchase price is: investment amount+investment amount × years × 10%. "Number of years" is accurate to months, such as 3 months =0.25 years.

(II) Party C (the actual controller of the target enterprise) agrees that Party A (the investor) has the right to require Party C to buy back all or part of its shares in Party B (the target enterprise) under the following circumstances:

(1) As of 20 13, 12 and 3 1, Party B has not submitted the issuance materials to the China Securities Regulatory Commission, or as of 20 14, 12 and 3 1, due to

(2) In 2011year, the sales of a single major customer did not fall below 50% (inclusive), the total sales did not reach more than 240 million yuan or the after-tax net profit did not reach 50 million yuan (it can fluctuate within the range of 10%);

(3) In 2012, the sales of a single major customer did not fall below 30%, the total sales did not reach more than 350 million yuan, or the after-tax net profit did not reach 80 million yuan (it can fluctuate within the range of 10%);

Questions raised:

1. Is it illegal to lend or turn between enterprises, is it a financial business, and is it legal?

2. Is there any essential difference between the above-mentioned "attached term" or "attached condition" share repurchase and inter-enterprise capital lending or misappropriation lending? Is this clause valid?

Three. Relevant laws, regulations and interpretations

1. Article 52 of the Contract Law stipulates that a contract is invalid under any of the following circumstances:

(1) One party enters into a contract by means of fraud or coercion, which harms the interests of the state;

(2) Malicious collusion that harms the interests of the state, the collective or a third party;

(3) Covering up illegal purposes in a legal form;

(4) damaging the public interest;

(5) Violating the mandatory provisions of laws and administrative regulations.

"the Supreme People's Court on the application of

Article 4 stipulates: "After the implementation of the Contract Law, the people's court shall confirm that the contract is invalid on the basis of the laws formulated by the National People's Congress and its Standing Committee and the administrative regulations formulated by the State Council, and not on the basis of local regulations and administrative rules".

"the Supreme People's Court on the application of

Article 14 stipulates: "The mandatory clauses stipulated in Item (5) of Article 52 of the Contract Law refer to the effective mandatory clauses".

Interpretation: Pay full attention to Item (3), Item (4) and Item (5) of Article 52. In judicial practice, there are a large number of cases that apply these three items to determine that the inter-enterprise loan or misappropriation loan relationship is invalid. For example, Beijing No.1 Intermediate People's Court (2002) No.8282 judgment: "On the validity of loan contract. Because Janos is a non-financial institution, it does not have the business scope of issuing loans. Therefore, the loan contract signed with Shenzhen Lubao Company violates China's relevant financial laws and regulations and should be confirmed invalid. " Chongqing No.1 Intermediate People's Court (2005) Yu Yi Zhong Min Zi Chu No.540 Judgment: "The borrowing of funds between enterprises disturbs the national financial order, which is not conducive to the effective supervision of the financial market by the state, thus harming the interests of the public. According to Item (4) of Article 52 of the People's Republic of China (PRC) Contract Law, contracts that harm the public interest are invalid. "

Of course, at present, the mainstream view in judicial practice holds that the premise of applying item (5) is that the effective mandatory provisions in the law or the State Council administrative regulations explicitly prohibit inter-enterprise capital lending, and the only financial provision that meets this condition is the General Principles of Loans, but the General Principles of Loans are only departmental regulations in effect, and it is impossible to directly apply item (5) to confirm its invalidity.

2. Law on Commercial Banks (1995 promulgated by No.47 of the 8th Presidential Decree and revised by No.47 of the 6th Presidential Decree in 2003)

Article 1 1 stipulates that "no unit or individual may engage in commercial banking business such as absorbing public deposits without the approval of the the State Council banking regulatory authority".

Banking Supervision Law of the People's Republic of China (promulgated by Presidential DecreeNo. 1 1 in 2003 and amended by Presidential Decree No.58 in 2006).

Article 19 stipulates that no unit or individual may set up or engage in the business activities of banking financial institutions without the approval of the State Council Banking Regulatory Authority.

Measures for banning illegal financial institutions and illegal financial business activities (the State Council Decree No.247 1998)

Article 4 stipulates that "illegally issuing loans" is an illegal financial business activity without the approval of the People's Bank of China.

Article 5 stipulates: "No unit or individual may establish a financial institution or engage in financial business activities without the approval of the People's Bank of China according to law".

Reply of China People's Bank to the Supreme People's Court's Reply on Inter-enterprise Lending (Yintiao Law [1998]No. 13).

The Supreme People's Court Economic Tribunal. (1998)98 received. After study, the answers to the relevant questions are as follows: According to Article 4 of the Interim Regulations on the Administration of Banks in People's Republic of China (PRC), non-financial institutions are prohibited from engaging in financial business. Lending is a financial business, and enterprises of non-financial institutions are not allowed to lend to each other. Lending activities between enterprises can not only prosper China's market economy, but also disrupt the normal financial order, interfere with the implementation of national credit policies and plans, weaken the state's monitoring of investment scale, and cause chaos in the economic order. Therefore, the so-called loan contract (or loan contract) concluded between enterprises violates national laws and policies and should be considered invalid. "

The Supreme People's Court's Opinions on People's Courts Handling Lending Cases (Fa (Min) [199 1] No.21)

It is stipulated that loan disputes between citizens, between citizens and legal persons, and between citizens and other organizations should be accepted as loan cases. The highest interest rate of private lending is four times that of similar loans from banks.

Reply of the Supreme People's Court on How to Confirm the Effectiveness of Lending between Citizens and Enterprises (Fa Shi [1999] No.3)

It is stipulated that the loan between citizens and non-financial enterprises (hereinafter referred to as enterprises) belongs to private lending, except that enterprise A illegally raises funds from employees in the name of lending; B enterprises illegally raise funds from the society in the name of lending; C enterprises issue loans to the public in the name of lending; D Except for other four special cases, such as violation of laws and administrative regulations, as long as the meaning of both parties is true, it can be considered valid.

Interpretation: The Interim Regulations on the Administration of Banks in People's Republic of China (PRC) has been replaced by the Law on Commercial Banks. The Law on Commercial Banks and the Law on Banking Supervision and Administration only stipulate that no unit or individual may engage in banking business such as absorbing public deposits without authorization, but it is not clear whether borrowing funds from banks or other enterprises is an exclusive financial business that can only be engaged by banks. The only relevant administrative regulation issued by the State Council, Measures for Banning Illegal Financial Institutions and Illegal Financial Business Activities, only stipulates that "illegal loan issuance" belongs to illegal financial business activities, but does not specify which businesses belong to "illegal loan issuance".

Some judicial interpretations of "private lending" by the Supreme Court hold that the capital lending between natural persons and between natural persons and enterprises belongs to "private lending" and does not belong to the exclusive financial business that can only be engaged by banks, and its legitimacy has been clearly confirmed; At the same time, it is further clarified that private lending cannot illegally raise funds and cannot lend to the public, which is completely in line with China's current national conditions. Combined with the above judicial interpretation and legal analysis, it is not difficult to draw a conclusion that "illegal lending" refers to lending funds to unspecified public (including natural persons, legal persons or other unincorporated units), that is, lending funds between enterprises to specific entities does not belong to "illegal lending", nor does it belong to the business activities of banking financial institutions prohibited by law.

The document of China People's Bank 1998 does not belong to national laws or administrative regulations of the State Council. This document excessively expands the extension of financial business, directly classifies all "lending" as financial business, and concludes that inter-enterprise lending can not prosper China's market economy, but will disrupt the normal financial order and cause economic order disorder, which should be banned. This is obviously contrary to legal principles and does not conform to China's national conditions.

3. General Rules for Loans (Order No.2 of the People's Bank of China 1996)

Article 2 stipulates that the lender mentioned in these General Rules refers to a Chinese-funded financial institution legally established in China to engage in loan business.

Article 2 1 stipulates that the lender must be approved by the People's Bank of China to operate the loan business, hold the Legal Person License of Financial Institution or Business License of Financial Institution issued by the People's Bank of China, and be approved and registered by the administrative department for industry and commerce.

Article 6 1 stipulates: "Administrative departments at all levels, enterprises and institutions, cooperative economic organizations such as supply and marketing cooperatives, rural cooperative foundations and other foundations shall not engage in financial business such as deposits and loans. Enterprises shall not handle lending or disguised lending financing business in violation of state regulations. "

Reply of the Supreme People's Court on how to deal with overdue loans of borrowers under enterprise loan contracts (Fa Fu [1996]15)

Provisions: An enterprise loan contract is invalid if it violates relevant financial regulations. If the borrower fails to repay the principal after the expiration of the contract period, and the parties bring a lawsuit to the people's court, the people's court shall, in addition to making a judgment in accordance with the relevant provisions in Item (2) of Article 4 of the the Supreme People's Court Law (Fa Shi [1990] No.27 "Answers to Several Issues Concerning the Trial of Joint Venture Contract Disputes"), also determine the interest of the borrower from the date when the repayment period agreed by both parties expires to the date when the court makes a judgment.

Interpretation: The current General Rules for Loans was promulgated by the People's Bank of China 1996. In September 2003, the central bank issued a document for the first time asking five ministries, three policy banks, four wholly state-owned commercial banks and four joint-stock commercial banks to revise the General Principles of Loans. In this "document", the central bank took the initiative to delete Article 6 1. Subsequently, in 2004, the central bank publicly solicited opinions for revision nationwide for the first time, and "Article 6 1" was also deleted from the draft for comments. However, due to multiple reasons, the exposure draft was shelved for several years. Until April 20 10, the the State Council executive meeting said that it would revise and promulgate the general rules of loans, but there was still no news. There are many controversies about the reasons why the revised version of General Principles of Loans is difficult to be revised and promulgated. Among them, "the legitimacy of inter-enterprise capital lending" is bound to be one of the focuses. The parties have different understandings, and it is still impossible to fully reach an understanding in the short term.

At the same time, it should be noted here. As the General Rules for Loans is only a departmental regulation of the People's Bank of China, it cannot be deemed invalid because it violates the mandatory provisions in the General Rules. The document [1996] 15 has not been abolished at present, but its guiding significance in judicial practice has been very small.

4. Company Law

Article 75: "In any of the following circumstances, a shareholder who votes against the resolution of the general meeting of shareholders may request the company to purchase its equity at a reasonable price:

(a) the company has not distributed profits to shareholders for five consecutive years, but the company has made profits for five consecutive years and meets the conditions for distributing profits as stipulated in this Law;

(2) The merger, division or transfer of the company's main property;

(3) Upon the expiration of the business term stipulated in the Articles of Association or other reasons for dissolution stipulated in the Articles of Association, the shareholders' meeting adopts a resolution to amend the Articles of Association to make the Company survive.

If the shareholders and the company fail to reach an equity purchase agreement within 60 days from the date of adoption of the resolution of the general meeting of shareholders, the shareholders may bring a lawsuit to the people's court within 90 days from the date of adoption of the resolution of the general meeting of shareholders. "

Article 143, paragraph 1: "A company may not purchase its own shares. However, except for one of the following circumstances:

(1) Reduce the registered capital of the company.

(2) Merging with other companies holding shares of the Company;

(3) Rewarding shares to employees of the Company;

(4) Shareholders request the company to purchase their shares because they disagree with the resolution of merger or division made by the shareholders' meeting. "

Interpretation: the company law stipulates the "share repurchase" of limited liability companies and joint stock limited companies. Obviously, under normal circumstances, companies are not allowed to buy back their own shares. Only in a few legal cases can companies buy back shares, but for limited liability companies, many of them are realized through civil litigation.

5. the Supreme People's Court's answers to some questions about the trial of joint venture contract disputes (Fa [Jing] Fa [1990] No.27)

Article 4 "On the Guarantee Clause in the Joint Venture Contract"

(1) The guarantee clause in the joint venture contract usually refers to the clause that although one party to the joint venture invests in the joint venture, participates in the joint venture and shares the profits of the joint venture, it does not bear the responsibility for the losses of the joint venture, but still recovers its capital contribution and collects fixed profits when the joint venture loses. This guarantee clause violates the principles of * * * negative profits and losses and * * * taking risks that should be followed in joint venture activities, and damages the legitimate rights and interests of other joint ventures and creditors of joint ventures. So it should be confirmed invalid. If the joint venture suffers losses, all the fixed profits collected by one party according to the guarantee clause shall be withdrawn to make up for the losses of the joint venture. If there is no loss, or there is still a surplus after compensation, the remaining part can be used as the surplus of the joint venture, which can be rationally distributed by both parties through re-negotiation or redistributed according to the investment proportion of each party to the joint venture.

(2) As a joint venture, an enterprise legal person or institution legal person invests in the joint venture, but does not participate in the joint venture, nor does it assume the risk responsibility of the joint venture. If the principal and interest are recovered on schedule regardless of profit and loss, or the fixed profits are collected on schedule, it is obviously a joint venture, but it is actually a loan, which violates the relevant financial regulations, and the contract shall be confirmed to be invalid. In addition to returning the principal, the investor shall also receive the interest obtained or agreed upon by the investor, and impose a fine equivalent to the bank interest on the other party.

(3) Where a financial trust and investment institution invests in a joint venture according to law, it may share the fixed profits in accordance with the contract, but it shall also bear the liability for losses of the joint venture.

Interpretation of the Supreme People's Court on the Application of Law in the Trial of State-owned Land Use Right Contract Disputes (Fa Shi [2005] No.5)

Article 26 stipulates: "If the parties to a cooperative real estate development contract agree not to bear business risks and only charge a fixed amount, it shall be deemed as a loan contract."

Interim Measures for the Administration of Credit Funds (issued by the People's Bank of China 1994)

Provisions: The term and transaction object of securities repurchase are the same as interbank lending. Therefore, the release of repurchase funds and the irrecoverability of securities are actually the same as the lending between financial institutions, which belongs to "fake repurchase and real lending".

Notice on Approving the Request of the People's Bank of China on Further Improving the Settlement of Securities Repurchase Debt (Guo Fa [1996] No.20)

It is stipulated that some securities trading places, financial institutions and financial securities institutions violate the relevant provisions of the state, buy short and sell short in the name of securities repurchase, borrow funds in disguise, disrupt the financial order, and bring serious harm to the implementation of the national macro-control policies and the stability of the financial order. Securities repurchase has actually evolved into capital lending.

Interpretation of the Supreme People's Court on the Applicable Law in the Trial of Construction Contract Disputes (Fa Shi (2004) 14)

Article 6 stipulates that the parties have an agreement on the advance payment and its interest, and the contractor's request to return the advance payment and its interest in accordance with the agreement shall be supported.

Interpretation: The Supreme Court made it clear that in the case of joint venture, investors do not participate in joint venture and do not follow the principle of * * * negative profits and losses, and * * * bears the risks. Their legal relationship is "obviously a joint venture, but actually a loan", which violates relevant financial laws and regulations and should be confirmed invalid. In the case of cooperative real estate development, if the investor does not bear the operational risk, it will also be considered as a legal relationship of lending. Similarly, for securities repurchase, if you just buy short in the name of securities repurchase, the legal relationship will be considered as "fake repurchase, real lending." However, in the construction project, the Supreme Court clearly confirmed the legality of capital lending between enterprises in the form of advance payment.

It can be seen from the above judicial interpretation that if there is no actual transaction content such as buying, selling and developing. , or violates the basic principles of * * * joint investment and * * * risk at your own risk, the court tends to deal with it according to the principle that it is a legal relationship called loan legal relationship. If there are actual transaction contents, or the purpose of capital contribution or advance payment is not to obtain interest income, but to realize a specific transaction between one party and the other party, the court will generally support it.

Even, due to the prevalence of inter-enterprise lending, the contract law does not explicitly prohibit it, and private lending by natural persons has been liberalized, so it is unfair for enterprises to continue to prohibit inter-enterprise lending. As early as 200 1, 1 1, the Supreme People's Court specifically sought the opinions of relevant departments on "the legality of inter-enterprise capital lending", and even suggested that inter-enterprise lending should be liberalized. In recent years, in judicial practice, the court generally does not easily admit that the direction is changed to a loan. For agreements with actual transaction contents, most of them will recognize the calculation method of interest as the corresponding price agreed by both parties (for example, Shanghai No.1 Intermediate People's Court (2009) Huyisan (Commercial) Civil Judgment).

6. Some legal issues concerning the trial of entrusted financial management cases in securities, futures and national debt markets (article published by the Supreme People's Court in the name of virtual author Gao Minshang in 2006).

The contents related to this article include: The author believes that after the promulgation and implementation of the Contract Law, the people's courts should fully respect the parties' freedom of contract when trying civil and commercial cases, and be more cautious when determining the validity of contracts. Only when the contract concluded by the parties violates the mandatory and prohibitive provisions of laws and administrative regulations can the contract be deemed invalid.

However, as far as the entrusted financial management contract is concerned, although the current laws and administrative regulations do not expressly prohibit it, in principle, it seems that the entrusted financial management contract is not prohibited by law. However, in practice, entrusted financial management mostly occurs in the fields of securities and futures, and is basically regarded as a new financial product and a derivative financial business. In particular, China has always adopted strict financial management policies and implemented financial business franchising, so in terms of financial quality, entrusted financial management should be included in the franchise category.

At present, the law has not specifically regulated entrusted financing activities, and the effectiveness of entrusted financing contracts should be carefully weighed between maintaining national financial security and market transaction security in combination with China's financial policy, and treated differently according to the actual situation.

There are usually three kinds of guarantee clauses: (1) guarantee the fixed return of principal and interest; (2) guarantee the minimum return on principal and interest; (3) the clause to guarantee the principal from loss. The guarantee clause is an incentive and restraint mechanism set by both parties in the form of autonomy of will; Although the current civil and commercial legal system does not explicitly deny the validity of the guarantee clause, the author still tends to think that the guarantee clause is invalid, and the people's court should not support the client's request to ask the trustee to perform the guarantee clause in accordance with the contract in litigation.

Interpretation: Although this article is not a judicial interpretation of the Supreme Court, any lawyer should not underestimate its guiding significance to judicial practice, and it can definitely represent the dominant opinions of most judges of the Supreme Court.

The Supreme Court held that we should be cautious when confirming the invalidity of contracts, but at the same time, we should also consider the great influence of such contracts in practice. If it belongs to related industries strictly controlled by the state, we should fully consider the policy orientation of the state to related industries. When encountering specific problems, we must carefully weigh the safety of related industries and the safety of market transactions according to the national management requirements for related industries, and treat them differently according to the actual situation. Following the above guiding ideology, this paper finally concludes that the guarantee clauses in the entrusted financing contracts of securities, futures and national debt markets are invalid.

Four. Lawyer's opinion

Through the collation and analysis of the above laws and regulations, the author believes that at least the following conclusions can be drawn:

1. The current laws and administrative regulations do not clearly stipulate that inter-enterprise capital lending is an "illegal lending" or a chartered financial business that should be controlled by financial policies, nor do they explicitly deny the legality of this behavior in terms of effectiveness.

2. After the promulgation and implementation of the Contract Law and related judicial interpretations, the people's courts are very cautious in determining the validity of contracts. Generally speaking, contract terms will be considered invalid only when they violate the mandatory provisions of laws or administrative regulations. However, the people's court may also "cover up the illegal purpose in a legal form" or "harm the public interest" to confirm that the corresponding provisions are invalid.

3. Existence is reasonable, and the legitimacy of capital lending between natural persons and between natural persons and enterprises is gradually recognized in judicial practice. At the same time, the China People's Bank's "General Principles of Loans" draft for comments and the Supreme People's Court's relevant suggestions all reflect the future legislative trend: to recognize the legality of inter-enterprise lending.

4. Before the revision of the current departmental rules promulgated by the People's Bank of China and other financial supervision departments, these departmental rules still hold that "enterprises shall not handle lending or disguised lending financing business in violation of state regulations", and lending is a financial business, and lending activities between enterprises will disrupt the normal financial order and cause chaos in the economic order.

5. Finance is the financing of funds, the general name of currency circulation, credit activities and related economic activities, and the lifeline of the national economy, and the security of the financial industry is the core of national economic security. Therefore, the state's supervision of the financial industry has been very strict, and it is impossible for the state to let loans between enterprises be separated from financial supervision. Therefore, even if the lending between enterprises is liberalized in the future, it will definitely be conditionally liberalized and will be effectively supervised. At this stage, under the background that the judicial environment and policy environment in China are so closely linked, it is suggested that lawyers and enterprises should not easily challenge the authority of policies, and before the introduction of new regulations, they should first admit that capital lending between enterprises can not be protected by law.

6. Under normal circumstances, the invested target enterprise itself cannot be used as the main body of share repurchase. In practice, the actual controller (other shareholders or managers) of the target enterprise is generally used as the main body of share repurchase. The essential difference between share repurchase and capital borrowing should be analyzed from the perspectives of what the investment purpose is, whether there are actual transaction contents, whether there are risks, and whether there is a need for repurchase.

The author believes that the "conditional" share repurchase clause has the actual transaction content (that is, the company's equity), and the investor's investment purpose is to make profits after the target company goes public or after the target company grows. After the investment, the result of share repurchase is not inevitable, but the procedure of share repurchase can only be started after certain conditions are met, and investors must also bear investment risks (such as the risk that the target company fails to go public successfully), so the "conditional" share repurchase clause should not be regarded as inter-enterprise funds. As long as there is no other legal invalidity of the repurchase clause, it should be confirmed that it is legal and effective.

However, the term-attached share repurchase clause will inevitably lead to the result of share repurchase. The purpose of investment is only to obtain the interest income of the invested funds for a period of time. Equity transfer is only a means to obtain interest income, and investors do not have to bear any risks. Therefore, the "term-attached" equity repurchase clause is a diversion of funds, which is probably not protected by law under the existing legal framework.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.