The legal risks of private equity funds are:

1, the legal risk of listing cancellation, the general seller often hides some hidden debts;

2. The legal risk of withdrawal from equity transfer. In the investment agreement, it is agreed with the company that the private equity fund can withdraw from the repurchase clause at any time to maximize its own interests.

3. Legal risks of liquidation withdrawal. Private equity funds often agree on the priority of liquidation with the invested enterprises when investing.

Legal objectivity:

Article 2 of the Interim Regulations on the Administration of Private Investment Funds

The term "private investment fund" as mentioned in these Measures refers to an investment fund set up in People's Republic of China (PRC) by raising funds from investors in a non-public way.

The investment of private equity fund property includes buying and selling stocks, equity, bonds, futures, options, fund shares and other investment targets agreed in investment contracts.

These Measures shall apply to the registration, fund raising and investment operation of companies or partnerships established for the purpose of investing in private equity funds and assets managed by fund managers or general partners.

These Measures shall apply to securities companies, fund management companies, futures companies and their subsidiaries engaged in private equity fund business. Where other laws and regulations and the relevant provisions of China Securities Regulatory Commission (hereinafter referred to as China Securities Regulatory Commission) provide otherwise for the above-mentioned institutions to engage in private equity fund business, such provisions shall apply.