Research On The Legal Protection Of Private Equity Investors In China

With the prosperity and development of the capital market,as a new financing tool,private equity investment funds reduce the financing costs of the target company,but also promote the target company to improve its internal organizational structure and related systems.Of course,with the rapid development of the private equity investment industry,the lagging laws,the differences in the ability of each subject to obtain information in the investment process,and various restrictions on capital withdrawal have brought huge investment risks to investors,which cannot guarantee that investors can successfully retrieve assets and get returns.In order to solve these problems,analyze the causes of the problems,and refer to the mature experience abroad,we can improve them from three aspects: improving the access standards for qualified investors,formulating a unified legal system for information disclosure,and relaxing the exit path of private equity investment.First,we should protect from the perspective of investors themselves.As the relevant systems of investors are scattered in other documents,they cannot reflect the importance of laws on investor protection.Through the form of legislation,a unified normative document formulated by a unified legislature can better protect the legitimate rights and interests of investors.The refinement of investor access standards can also reduce the risk burden of investors from the source.Secondly,formulating a unified information disclosure document can ensure that investors can timely and accurately obtain useful information and make scientific decisions in the investment process.The normative document should make differentiated disclosure systems for different types of investors.It should specify the types of responsibilities that the information disclosure regulatory subject and the obligor should bear when the rights and interests of investors are violated.Finally,the exit mechanism of private equity investment includes four ways: IPO exit,equity transfer exit,equity repurchase exit,and liquidation exit.In view of the requirements that the target company needs to meet for listing in different sectors,the listing requirements are reduced "according to local conditions".In the process of equity transfer,the shareholders’ identity of investors shall be specified to allow them to transfer freely in the process of merger and acquisition.In the process of share repurchase,it is emphasized to cancel the capital reduction procedure and break the deadlock after the shareholders’ meeting fails to pass the capital reduction resolution.In the process of liquidation of the target enterprise,investors shall be given special application rights,and the reasons for applying for compulsory dissolution shall be added,so as to break through the limitation of the contract term and give investors the right to request liquidation when the investment project has not been completed.In the process of bankruptcy liquidation,reset the order of bankruptcy liquidation: wages and labor insurance premiums owed to employees-investors’ property-the bankrupt enterprise pays the taxes owed to help investors exit smoothly.