There are two kinds of private equity funds commonly used in the financial market, one is contractual private equity funds based on signing entrusted investment contracts, and the other is corporate private equity funds based on investing in joint-stock companies. At present, the more popular private equity funds in China are generally contractual private equity funds.
From the legal nature, contractual private equity fund is essentially a trust legal relationship, and its parties include promoters (fund managers), investors (fund share purchasers) and beneficiaries (generally investors or fund share holders). Investors entrust trust funds to fund managers through contracts (trust contracts); Fund managers use fund funds for securities investment or industrial investment in their own names. Investment gains are shared by share holders, and investment losses are also shared by fund share holders. At the same time, the fund manager receives remuneration as agreed. Before the introduction of relevant laws and regulations to adjust private equity funds in China, we can supervise such private equity funds with reference to the relevant provisions of the Trust Law.
Due to the lack of systematic legal norms, there are often huge potential risks in the operation of contractual private equity funds in China, and even become tools for some lawless elements to seek illegal interests. In practice, there are two kinds of illegal private equity funds: illegal fund-raising and illegal or disguised absorption of public deposits.
According to the provisions of China's criminal law, illegal fund-raising refers to the behavior of legal persons, other organizations or individuals to raise funds from the public without the approval of the competent authorities. The object of illegal fund-raising is the public, and most of the means are fraud, deceiving the public and inducing their investment by promising high returns and high interest rates. Fraud is the most important reason prohibited by law. Generally speaking, the target of private equity funds is a few specific investors, and the threshold of these investors is generally high. The amount of funds involved should be of a certain scale, such as 6.5438+0 million yuan. Its purpose is * * * to invest together, and * * * to enjoy the benefits, including risks. However, if the promoters of private equity funds promise investors a high proportion of guaranteed income, they can be identified as illegal fund-raising.
According to the laws of our country, no unit or individual may engage in the business of absorbing public deposits or absorbing public deposits in disguised form without the approval of the competent financial department, otherwise it will constitute an illegal act. The fundamental difference between illegal or disguised absorption of public deposits and private equity funds lies in whether to pay interest. The income of private equity funds comes from risk income and should not involve any form of fixed interest, otherwise it will be illegal.
To sum up, if the establishment of private equity funds conforms to the provisions of China's trust law, its legitimacy should be beyond doubt, but in its specific operation process, it must not violate the relevant provisions of existing laws.