I. Revised Company Law and Securities Law
The Company Law is the main legal basis for the establishment and operation of corporate private equity funds, while the Securities Law regulates the exit channels of private equity investment. In 2005, the Company Law and the Securities Law were revised simultaneously. The revised company law stipulates that a joint stock limited company can be established with less than 200 promoters, which greatly reduces the standards for establishing limited liability companies and joint stock limited companies. Requirements for reducing the proportion of industrial property rights and non-patented technology investment; Make new provisions on installment payment of registered capital and cancel the general restrictions on the company's foreign investment. The revised Securities Law reduces the capital scale requirements for listed companies, and has no rigid requirements for profitability.
Two. People's Republic of China (PRC) partnership enterprise law
On August 27th, 2006, the National People's Congress revised the Law of People's Republic of China (PRC) on Partnership Enterprises, which came into effect in June, 2007, providing a legal framework for the development of limited partnership private equity funds. The revisions related to private equity funds mainly focus on the following three aspects: first, the provisions on limited partners and limited liability partnerships have been added, and the number of partners in limited partnerships should generally not exceed 50; The second is to allow legal persons or other organizations to be partners; The third is to clarify the principle of partnership enterprise income tax collection, and the partnership enterprise income tax is paid by the partners respectively.
Three. Provisions on the Merger and Acquisition of Domestic Enterprises by Foreign Investors
At the end of 2005, Carlyle proposed to acquire 85% equity of Xugong Machinery, which has always been regarded as the leading enterprise of domestic machinery and equipment enterprises. On August 8, 2006, the Ministry of Commerce, together with six ministries and commissions, issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, which strengthened the supervision and examination of leading enterprises or key industries involved in foreign mergers and acquisitions, and strictly restricted domestic enterprises from listing overseas in the form of red chips. Overseas listed companies must complete the whole process of fund receipt and payment within one year after the approval of the establishment of SPV (Special Purpose Vehicle). The right to approve the listing of red chips has been centralized from the former municipal government to the current Ministry of Commerce.
Four. Interim Measures for the Administration of Venture Capital Enterprises
5438+065438+In June 2005, the National Development and Reform Commission, the Ministry of Science and Technology and other ten ministries and commissions jointly promulgated the Interim Measures for the Management of Venture Capital Enterprises, aiming at promoting the development of venture capital enterprises, standardizing their investment operations and encouraging them to invest in small and medium-sized enterprises, especially small and medium-sized high-tech enterprises.
Verb (abbreviation of verb) Interim Measures for the Administration of Industrial Investment Funds
In 2006, in order to deepen the reform of investment and financing system, promote industrial upgrading and economic restructuring, standardize the establishment, operation and supervision of industrial investment funds, and protect the legitimate rights and interests of fund parties, the Interim Measures for the Administration of Industrial Investment Funds was formulated, which stated and stipulated the concept, initiation and establishment, fund company, fund custodian, fund manager, investment operation, supervision and management, termination of settlement and punishment of industrial investment funds. The "Measures" stipulate that the establishment of industrial funds must be approved by the National Development and Reform Commission, with no more than 200 investors, and the scale to be raised is not less than 654.38 billion yuan, with a duration of not less than 654.38+00 years and not longer than 654.38+05 years.
In addition to the above-mentioned laws and regulations, the Trust Law, the Measures for the Administration of Trust Plans of Trust Companies' Collective Funds, the People's Republic of China (PRC) Small and Medium-sized Enterprises Promotion Law, the Regulations on the Administration of Foreign-invested Venture Capital Enterprises, the Commercial Bank Law, the Insurance Law and other relevant laws and regulations have affected the operation of private equity funds in China to varying degrees.