Legal Analysis About Small And Medium-Sized Enterprises Financed By Private Equity In Our Country

Small and medium-sized enterprises have made a great development both in quantity and quality since the opening-up policy was established in 1978. They have become an inseparable part of the national economy. But due to lack of scientific management and crisis conscious, small and medium-sized enterprises are easy to be trapped in the capital chain—broken problem. While financial institutions such as banks are often reluctant to help small and medium-sized enterprise out of capital problems because of the high risks. Lacking money has become the primary problem in the development of small and medium-sized enterprises. Private equity appeared in China in the early 21 st century, and developed quickly from then on, playing a vital role in the transformation of China’s economic development. But currently corresponding law for private equity hasn’t been fully completed.An environment without regulation of law is bound to trigger a lot of speculative behaviors and crimes.This paper attempts to help small and medium-sized enterprises reduce risks and safeguard their interests when be invested by private equity in the flawed environment.Several real cases are used to prove feasibility and advantages of private equity in this paper. And the author holds the opinion that joint efforts should be made by small and medium-sized enterprises, the government and the legislature to improve the efficiency of private equity.The author describes their responsibility and duty respectively in the paper.In addition, the author put forward some suggestions for improving private equity financing small and medium-sized enterprises from the perspective of a student majored in law.