What is a corporate private equity fund?

What about corporate private equity funds?

Corporate private equity funds are a form of equity investment companies that raise funds by issuing shares.

The company is composed of shareholders with the same investment objectives, and has the highest authority, the shareholders' meeting, the executive body, the board of directors, and the supervisory body, the supervisory board.

Through the corresponding power allocation and checks and balances of these three major institutions, the company can serve the interests of shareholders to the greatest extent.

Investors subscribe to the fund by "purchasing shares of the fund company" and become shareholders of the company, and enjoy management rights, decision-making rights, interest distribution rights and residual asset distribution rights and other rights stipulated in the "Company Law".

The difference between corporate private equity funds and corporate funds: However, the establishment procedure of a corporate private equity fund is the same as that of a general joint-stock company, and its legal person structure is also the same as that of a general company, with a general meeting of shareholders, a board of directors, a board of supervisors, etc.

However, the operation and management structure of corporate private equity funds is very different from that of ordinary companies: First, corporate private equity funds do not have an operation and management organization. Instead, they entrust professional investment management institutions or external professional teams to manage operations, and the company is transformed into a fund.

Secondly, the company's funds are also entrusted to professional custodians for safekeeping, which facilitates the monitoring of fund inflows and outflows.

Advantages of corporate private equity funds: 1. Standardized management ensures the legitimate rights and interests of investors. Corporate private equity funds have a sound modern enterprise management system, with shareholders' meetings, boards of directors, board of supervisors, etc., through corresponding management of these three institutions.

Power allocation and checks and balances enable the company to serve the interests of shareholders to the greatest extent, so the characteristics of management regulations are relatively obvious.

2. With strong assets and operational pressure, small company-type private equity funds have legal personality and operate in accordance with the articles of association and business model of joint-stock companies. According to the needs of business development, corporate-type private equity funds can either increase capital or expand shares, or through conventional channels.

, obtain bank financing within the allowed range to expand the scale of the fund, and the company has strong sustainable development capabilities.

3. Steady investment, conducive to long-term investment. Corporate private equity funds have a sound investment style and careful decision-making.

The management and operation team has a project manager, who leads his investment team to conduct project excavation and industry research. After layer-by-layer screening, investment indicator report evaluation, company on-site inspection and other basic work, the report is submitted to the fund management and operation team.

After careful verification and inspection, the fund management and operation team forms an investment proposal and finally submits it to the board of directors for investment resolution.

This decision-making system of layer-by-layer checks and step-by-step reporting ensures the scientificity and robustness of investment decisions and is conducive to long-term investment.

Disadvantages of corporate private equity funds: The biggest disadvantage of corporate private equity funds is double taxation: the company must pay various taxes in the name of the company, and shareholders must pay personal income tax on dividends in the name of individuals.

This not only inhibits the investment enthusiasm of shareholders to a certain extent, but also limits the scale effect of joint-stock investment companies.