How to complete a high-quality legal opinion that meets the requirements of fund industry associations?
First, be familiar with and deeply understand relevant laws and regulations.
Familiarity with laws, regulations and normative documents related to any business (hereinafter referred to as "legal provisions") is a necessary prerequisite for lawyers to practice. Lawyers who have completed the business of legal opinions should at least be familiar with the following legal provisions:
Securities investment fund law;
Interim Measures for the Supervision and Administration of Private Equity Funds;
Measures for the Registration of Private Investment Fund Managers and Fund Filing (Trial);
Guidelines for the registration of legal opinions of private fund managers;
Announcement on further standardizing the registration of private fund managers
Answers to questions related to the registration and filing of private equity funds (1) to (8);
Measures for the administration of securities legal business of law firms;
Practice Rules for Securities Law Business of Law Firms (for Trial Implementation).
The above-mentioned legal provisions are what lawyers must pay special attention to when issuing legal opinions, and are the basis for lawyers to issue legal opinions on what matters and how to issue legal opinions. (On March 26th, WeChat official account "Wu Tong Shu Xia V" pushed a very detailed list of laws and regulations related to the management and filing of private investment funds for your reference).
A lawyer who quoted a legal opinion for 20,000 to 30,000 yuan, or even several thousand yuan, obviously did not pay attention to the requirements of the above-mentioned legal provisions on the management of private equity funds, and it was unclear what work lawyers should do and what responsibilities they should bear according to law in order to issue legal opinions.
Second, correctly understand the breadth and depth of legal opinions.
Complete a high-quality legal opinion that meets the requirements of regulatory agencies, and the breadth and depth of the legal opinion should be appropriate.
The premise of correctly understanding the breadth and depth of legal opinions is to understand why lawyers need to issue legal opinions. The purpose of the law is to require lawyers to help private fund managers "self-discipline" through legal advice. If the legal opinion does not reach the necessary breadth and depth, it will not be able to achieve the purpose of restraining the private fund managers from "self-discipline".
The Guidelines for the Registration of Legal Opinions of Private Equity Fund Managers (hereinafter referred to as the Guidelines for Legal Opinions) have listed 14 items that lawyers need to express their opinions, which is only a basic delineation of the scope of items that lawyers should express their opinions.
It is completely wrong to think that lawyers only need to write down the relevant contents in the Guide to Legal Opinions. At present, the main problem that the legal opinions obtained from different channels fail to pass is that the legal opinions are mere formality, which does not help the applicant to be self-disciplined.
Below, I will take the matters listed in the Guidelines for Legal Opinions as an example to illustrate the breadth and depth of legal opinions.
The Guidelines for Legal Opinions require that lawyers should give legal opinions on the "litigation or arbitration in the last three years" of the institution applying for the registration of private equity fund managers (hereinafter referred to as the "applicant institution").
How to count the cases of litigation or arbitration in the last three years? For the sake of prudence, three years should be counted forward from the date of issuing legal opinions; All litigation and arbitration cases in the last three years, regardless of the nature of the case, the amount involved and the outcome, should be involved by lawyers in legal opinions. This is the breadth of legal opinions, or the boundary where lawyers express legal opinions.
The depth of legal opinions is reflected in the analysis and judgment of "litigation or arbitration in the last three years", including but not limited to the following analysis and judgment:
1, whether it will affect the legal existence of the applicant;
2, whether it will have a significant impact on the applicant's assets (involving effective survival);
3, whether it will have a significant impact on the applicant's shareholding structure;
4, whether it will have a significant impact on the applicant's legal representative qualification and senior management qualification;
5, whether to reflect the applicant's risk management and internal control system has major problems.
If all litigation or arbitration matters have been concluded, the impact of the results on the applicant institution shall be explained; If it is still in progress, it is necessary to judge its impact on the applicant. These are the depths of legal consultation. Without this depth, the lawyer's opinion is at best a description, not an analysis and judgment of relevant facts.
To solve the problem of the breadth and depth of legal opinions, we must rely on lawyers' experience and understanding of legal provisions and facts.
Third, the similarities and differences between the list of matters needing attention and the document.
The Guide to Legal Opinions gives 14 items that need lawyers' best efforts, and various best efforts lists or documents can also be found online. It is wrong to think that this is a lawyer's job, or that what lawyers need to do is already clear.
Fourteen things that need to be adjusted are the outlines of things that lawyers need to make clear, which does not mean the list of documents that need to be adjusted, nor does it mean all the things that need to be adjusted. We can't think that the 14 best practice given in the Guidelines for Legal Opinions is a list of all relevant documents that lawyers need to collect, and it is all the best practices. 14 urgent matters are only marked in the circle of 14, indicating the scope of 14 for lawyers. In order to meet the applicant's requirements for risk control and self-discipline, lawyers should perform their duties according to the specific situation of the enterprise, honestly, credibly and diligently determine the specific matters that should be covered in each emergency, and list the documents that need to be obtained one by one for each specific matter.
Next, I used the Guidelines for Legal Opinions to ask whether the applicant institution was legally established and effectively existed in China. Give an example to illustrate the relationship between all important items list and all important documents.
At present, the "mainstream version" we see on the Internet mainly lists the industrial and commercial registration and shareholders of the applicant institution, but does not analyze this provision of the Legal Opinion Guide from the legal level, and the listed content is still superficial. If the applicant is legally established and effectively exists in China. In the case of analysis, the items to be verified shall include:
1. Whether the applicant institution is established in China;
2, whether the applicant's shareholders or partners have the legal qualification to set up a fund manager (company or partnership);
3. Whether the establishment procedure of the applicant institution is legal;
4. Whether the industrial and commercial registration qualification of the applicant institution legally exists;
5. Whether the applicant actually operates;
6. According to Article 180 of the Company Law, whether the applicant institution should be dissolved;
7. Whether the applicant has paid off the debts in accordance with the provisions of the bankruptcy law.
The above matters can also be subdivided according to the specific situation of the enterprise. In order to verify the above matters, lawyers need to obtain corresponding evidence, and they need to obtain these evidence to form a list of documents to be obtained. The list of documents includes:
1. The applicant's current valid certificates include business license, approval certificate for foreign-invested enterprises, organization code certificate, tax registration certificate, foreign exchange registration certificate, bank account opening permit, social security registration certificate, provident fund account opening certificate, state-owned assets property right registration certificate (if any), etc.
2. Relevant industrial and commercial registration documents established by the applicant, including but not limited to the articles of association, shareholders' agreement, capital verification report, documents of shareholders' approval to invest in the company, etc.
3. The applicant's shareholder qualification documents, including the applicant's register of shareholders, the shareholder's main qualification documents, including the identity certificate and basic information questionnaire of the company's natural person shareholders, corporate shareholders's business license and articles of association, corporate shareholders's questionnaire, corporate shareholders's internal approval for the contribution of legal person shareholders to the applicant, etc.
4. Relevant documents of the applicant's previous industrial and commercial changes.
5. The applicant's recent audit report or financial report and tax payment certificate.
6. Search all information related to the legal establishment and effective existence of the applicant in China through the Internet and database.
Four. Complete due diligence as required.
Completing a high-quality legal opinion that meets the requirements of regulatory agencies requires the diligent and conscientious work of lawyers. What a lawyer has done and how to give legal advice are unavoidable contents of legal advice.
(A) the best way
The Fund Industry Association requires that law firms and their handling lawyers should refer to the Practice Rules of Securities Law Business of Law Firms (Trial) and take reasonable ways and means to obtain appropriate evidence materials according to actual needs in order to issue legal opinions. The due diligence methods that law firms and their handling lawyers can adopt include but are not limited to consulting written materials, on-the-spot verification, personnel interviews, Internet and database search, external interviews, consulting with administrative and judicial organs, organizations with public affairs functions, accounting firms, etc.
(B) the use of professional ability
The Practice Rules for Securities Law Business of Law Firms (Trial) requires that "lawyers should use their professional knowledge and ability to independently make inspection conclusions and issue legal opinions based on their own inspection behaviors. For the collection of evidence materials and other matters, it shall be handled in person and shall not be entrusted to the client; If the information provided by the client is used, the necessary inspection, analysis and judgment shall be made on its content, nature and effectiveness. "
(3) Working papers
Law firms and their handling lawyers shall make and keep relevant due diligence records and working papers. Working papers include all documents from the applicant institution, documents from external management departments and institutions, information obtained through Internet and database search, documents issued by lawyers requiring the applicant institution to fill in, and lawyers' work records (at least including lawyers' best work records, lawyers' meeting records on related matters, and emails and letters with the applicant institution). Working papers are the factual basis for the formation of legal opinions, the evidence of lawyers' due diligence and the barrier and shield for lawyers to avoid relevant legal risks.
Legal opinions are the fruits of lawyers' work. Without professional, diligent and cautious work, there will be no qualified work results.
Verb (abbreviation of verb) Drafting legal opinions as required.
When writing a legal opinion, it is necessary to fully explain the process of the lawyer mastering the relevant facts such as the situation of the applicant institution, and pay attention to the logical relationship between the relevant facts such as the situation of the applicant institution described in the legal opinion and the lawyer's conclusion in the legal opinion. Including:
(a) Describe the tuning process.
The fund industry association requires that the contents of legal opinions issued by law firms and their handling lawyers should include a complete description of the due diligence process, and should express clear legal opinions on the contents stipulated in the guidelines for legal opinions on the basis of due diligence.
(2) Reasonable argumentation
Lawyers should have appropriate evidence and reasons to identify and judge relevant facts and legal issues.
Lawyers should issue legal opinions independently, objectively and fairly, and ensure that there are no false records, misleading statements and major omissions in the legal opinions. In order to achieve a certain goal, we should not obviously misinterpret the legal provisions, or deliberately avoid the legal provisions that cannot support the opinions of lawyers.
No matter what matters are given legal advice, the basis must be facts and legal provisions related to facts. The facts expressed in the legal opinion and the facts on which it is based must be verified and supported by corresponding evidence, and there shall be no contrary facts. The legal provisions on which the legal opinions are based must be clear, and the contents of the legal provisions should be quoted when necessary. If the specific contents of the legal provisions are not quoted, the name and specific terms of the legal provisions shall be explained.
Necessary internal control of intransitive verbs law firm
Law firms and handling lawyers should analyze and judge whether the matters involved in due diligence are related to the law and whether they should fulfill the special care obligations of legal professionals. If it is necessary to perform the duty of special care for legal professionals, the specific ways, means and measures to perform the duty of special care shall be formulated and implemented.
Law firms engaged in the registration of legal opinions of private fund managers shall establish and improve the internal business quality and practice risk control mechanism to ensure that the legal opinions issued are true, accurate, complete, logical and fully demonstrated (refer to the Practice Rules for Securities Legal Business of Law Firms (Trial) for the above two paragraphs).
To this end, the author suggests that the internal control of the law firm should be explained at the beginning of the legal opinions (the above content of this article was completed a week ago, and the latest information tells us that some legal opinions recognized by the fund industry association are due to the good internal control system implemented by the relevant law firms).
I hope this article is helpful to lawyers, and I also hope that private fund managers can learn more about lawyers' work and responsibilities through this article.