Legal Issues on Private Equity Investment Funds in China

The so-called investment in China actually refer to the private equity investment funds,which itself is not a form of business organization. In fact,the organization form the fund takes will determine the risks it may assume,and the applicable law it will need to conform with. An industrial investment fund may take the form of a corporation,a trust,or a partnership,and each has its advantages and disadvantages. The author believes that the government shall guide the development of the industrial investment funds,and the relevant laws shall strictly regulate thereof;however,it may not be necessary to enact a separate Law on Industrial Investment Funds or a Law on Investment Funds. Instead,the private equity investment funds in China need to be regulated by the Corporation Law,Trust Law,and Partnership Law and their implementation rules,which should be revised and improved,as well as the state’s industrial investment policy and investment catalogue.