Is there any risk in the company's equity participation
Is there any risk in the company's equity participation? In recent years, with the development of the economy, various investment methods have gradually emerged. Many investors invest in shares with capital, hoping to get a higher rate of return by investing in shares. So is there any risk in the company's shareholding? Is there any risk in the company's shareholding 1
1. What are the risks of the company's shareholding
1. Risk of investment loss: If the company goes bankrupt, the more shareholders invest, the greater the risk of loss.
(2) No return on investment: If the company does not operate well, there will be no income or loss for the shareholders.
(3) legal risks: illegal business operations, etc.
(4) Internal risks: infighting, trust crisis, etc.
Second, what should the company pay attention to when entering the company
(1) Pay attention to the number of shares in the company, and the share should be clear;
(2) pay attention to the setting of the company's management organization;
(3) check the financial status, profitability and external liabilities of the company as much as possible;
(4) Pay attention to the company's current operation, whether there are lawsuits for mismanagement, etc.
(5) it is necessary to be clear about the distribution method of shareholders' profits.
(6) understand the provisions of the shareholder withdrawal mechanism to avoid future disputes.
III. What are the ways for the company to participate in shares
(1) The way of monetary investment. The way of monetary contribution refers to the way that shareholders directly invest in the company with funds. Before the company registration, the amount of capital subscribed by shareholders should be fully paid in cash in a temporary account opened by a limited liability company in a bank or other financial institution, and their credit certificates should be presented to the company to confirm their investment qualification and ability.
(2) the mode of investment in kind. Investment in kind must be assessed and appraised, and the state-owned assets management department shall calculate and confirm the results of the assessment and appraisal. Where a shareholder makes a contribution in kind at a fixed price, he shall go through the transfer formalities of the contribution in kind at the time of company registration, which shall be verified by the relevant capital verification institution.
(3) mode of industrial property rights investment. Industrial property investment can be roughly divided into two categories: one is patent right and trademark right; One is proprietary technology, in which the shareholders use industrial property rights (including non-patented technology) as their capital contribution to the company, and the shareholders must be the legal owners of the industrial property rights (including non-patented technology) and have been confirmed by legal procedures.
if a shareholder makes a contribution with industrial property rights (including non-patented technology) at a fixed price, it must make an evaluation and complete the transfer procedures before going through the company registration.
at the same time, the company law stipulates that the amount of capital contribution at the fixed price of industrial property rights shall not exceed 2% of the registered capital of a limited liability company
(4) the mode of land use right investment. If the land use right is used as a capital contribution, the investment price must be assessed by the land management department of the people's government at or above the county level, and reported to the people's government at or above the county level for examination and approval, and the corresponding land use certificate shall be handled. Is there any risk in the company's equity participation? 2
Any investment has certain risks, and the risks of equity investment can be divided into the following categories:
1. Investment decision-making risks
The risks of investment decision-making are mainly reflected in inaccurate project positioning and omission of decision-making procedures.
every project has a specific industry, and investors don't understand the industry, industry cycle and market environment where the project is located, which will lead to the risk of industry positioning. Incomplete understanding of the technical level and production capacity of the project enterprise and inaccurate targeting of the development stage of the invested enterprise will lead to the risk of investment type selection.
Take the investment in real estate industry as an example. When the economy turns from a trough to an inflection point of recovery, enterprises such as construction and cement will benefit first, and the stock price rise will start ahead of schedule.
However, real estate is a cyclical industry. Once the market demand is close to saturation, the pressure for the development of the real estate industry will multiply. At this time, investors should consider turning.
In addition, before making investment decisions, a series of procedures, such as investment letter of intent, due diligence, financial and legal audit, are required. The investment procedures are not perfect, due diligence is not comprehensive, and the omission of the procedures may cause unpredictable risks.
2. Business risk
Business risk mainly refers to the business risk of the invested enterprise. The reason for the risk may be that the market environment of the industry where the project is located has changed, such as economic recession. It may be that business decisions are wrong, such as blind expansion and excessive diversification.
it may also be that the ability of enterprise managers is not enough, or the management team is unstable. Changes in the operating conditions of enterprises can easily lead to unfavorable situations such as performance decline, shutdown and bankruptcy, which will affect the withdrawal of equity investment funds through listing, equity transfer and management buyback, resulting in no return on equity investment or even loss of principal
The most serious situation may even lead to total loss of principal.
The "real Kung Fu" catering brand that was once very popular was because the former chairman Cai Dabiao rashly implemented the internal management reform of "familyization", which triggered an internal contradiction and led to the withdrawal of almost all venture capital funds. At the end of the contradiction, Cai Dabiao was sentenced to 14 years in prison for embezzlement and misappropriation of funds, and nearly 5% of the shares were auctioned by the judiciary.
3. Risk of capital market
Sudden changes in specific policies and regulations of certain industries and certain investment methods, that is, changes in the capital market, are likely to increase the unexpected risks of investors. The' capital market risk' here mainly refers to the risks brought by policies (such as monetary policy, fiscal policy, industrial policy, regional development policy, etc.). When policies change, market prices fluctuate and risks arise immediately.
this kind of risk is a systematic risk that any investment project can't avoid, because changes in macro policies such as interest rate adjustment have an impact on every enterprise in the system, but different industries are affected to different degrees.
In addition, equity investment is prone to market manipulation or insider trading, which undermines the principle of openness, fairness and justice in the capital market, thus causing losses to some investors. At present, it is still very difficult for public security organs to supervise these behaviors.
On April 29th, Xu Xiang, a private equity tycoon known as an "investment genius", was arrested on suspicion of insider trading and market manipulation. It is reported that his sentence may be 2 years. It can be said that insider trading and market manipulation are the biggest illegal acts in the securities market at present.
4. Legal risks
Legal risks are mainly reflected in legal issues such as contracts and intellectual property rights. Management contracts or other similar investment agreements signed between equity investment funds and investors, such as security of deposit and guaranteed rate of return, are often not protected by law, which is one of investment risks. The improper conclusion of equity fund investment agreement and the protection of trade secrets may also bring contract legal risks.
intellectual property laws are of special significance to scientific and technological enterprises. If the core of the selected project is technology, we should pay attention to whether there is legal risk in the intellectual property rights of the core technology.
if the trademark patents and other intellectual property rights owned or used by the target enterprise are abnormal, it will affect the entry of capital, and even bear the liability for breach of contract or negligence in contracting.
for a startup company, the labor relationship between the entrepreneur and the original unit, the confidentiality of the original unit's proprietary technology and business secrets, and the agreement to abide by the prohibition of horizontal competition may all lead to intellectual property disputes.
in addition, legal risks are also manifested in the contract risks, irregular business risks, accidental injury risks of employees, imperfect rules and regulations, lax management of company seals and other issues in the daily operation of the target enterprise.
5. execution risk
the influencing factors of execution risk are mainly time. For equity investment, the investment cycle is generally long, and the withdrawal period of equity is generally three years, or five to seven years or even longer.
However, not all equity investments can be cashed out by listing within the agreed time, and more investment projects may not be listed for various reasons or can only be transferred within the original shareholders. Therefore, the imperfect exit mechanism will increase the risk of equity investment funds because there are many uncertain factors.
execution risk is also reflected in the operation of the investment process. The investment process is complicated, involving industrial and commercial registration, taxation, foreign exchange management, approval from ministries and commissions, and the stage of IPO preparation. The more complicated the implementation process, the longer it will take, which will affect the time cost and return rate of investment.
To sum up, the answer to the question of whether there is any risk in dealing with equity investment is yes. Although equity investment has rich returns, it is not a foolproof investment. On the contrary, it has many risks
including decision-making, operation and policies, which may affect the returns of equity investment. Therefore, everyone must be cautious and consult professionals in related fields such as finance and lawyers in detail when investing. Is there any risk in the company's equity participation? 3
Problems needing attention in equity investment
Equity investment, also known as venture capital, refers to the stock of other enterprises purchased by an enterprise or directly invested in other units with monetary funds, intangible assets and other physical assets, with the ultimate goal of obtaining greater economic benefits, which can be obtained by sharing profits or dividends or by other means. As an ordinary individual investor, the following points may be used as a reference:
(1) Do what you can according to your risk tolerance.
because of the high risk and high return of equity investment, the rational investment strategy is to regard equity investment as a part of investment allocation, instead of concentrating all the funds on equity investment.
(2) Consider the term of equity investment and avoid term mismatch.
The term of equity investment usually exceeds one year, most of which are 1-3 years, and some even as long as 1 years. Individual investors must know the investment period of the equity investment they participate in, and the capital invested must match it. Otherwise, using short-term funds to participate in medium-and long-term equity investment will inevitably lead to liquidity problems.
(3) the principle of self-owned capital investment.
the long term and high risk of equity investment determine that ordinary individual investors should adhere to the principle of participating with their own funds. If financing investment is adopted, although it will produce the leverage effect of income, it will also lead to the superposition of risks. As an ordinary investor, it should be the best choice to participate in equity investment within the limits that they can bear.
generally speaking, there are many risks in investing in shares, including decision-making risks, business risks of invested enterprises, legal risks and so on.