"Special review" venture capital to the left "company law" to the right

Beijing Sunland Law firm Zhang Mingjo, He Devin venture capital model is a foreign monk. After entering China, it will face China's local financial market environment and institutional environment.　　Among them, it includes how to coexist harmoniously with China's "Company law". I. The historical records of venture capital at the end of 15th century, Columbus made an ambitious sailing expedition, but had no money to buy a ship and recruit crews to implement the plan.　　The Queen of Spain sponsored the full cost of sailing expeditions, which had a history of subsequent geographical discoveries, and Spain flourished. To invent the electric lamp, Edison founded the laboratory and recruited more than 100 engineers. Edison spends as much as 800 dollars a week, the equivalent of a middle-class family earning more than half a year. The success of Edison's successful and costly invention, in addition to the well-known "1% inspiration and 99% perspiration", also benefited from the investment support of financier Pierpent Morgan.　　The electric light illuminates the whole world and interprets the perfect cooperation between inventors and financiers. Silicon Valley in the United States has created a new business culture, with HP, Microsoft, Yahoo, Google and Facebook as the information industry superstar. An interesting phenomenon is that these companies start their own business in the garage. A new idea, one or two start-up partners, a garage, almost everything they started. In these enterprises by "cock silk male" rapid rise to "high handsome" on the undertaking, they have received the support of venture capital.　　The success of Silicon Valley lies in its docking of innovation and capital, and venture investment has become the incubator and booster of American High-tech industry. Venture capital in the 1990s just entered China, the Chinese venture industry Shong, Yan and comprehensive was jokingly dubbed the Chinese wind cast "three big silly." In the ensuing 20 years, venture capital has grown from a spark into a prairie in China. They have invested in most of the companies in China's TMT (technology, media and communications) industry, including Alibaba, Tencent and Baidu, the leader of China's internet industry, to promote entrepreneurship and innovation in China.　　It is not even exaggerated to say that China's entrepreneurial investment history is basically China's information industry development history. Two. "Born in the South for Orange, born North for the" venture capital has experienced the bud, the first embryonic, development, climax, trough and ups and downs of the whole process, promoting the world-wide entrepreneurship and innovation.　　In the process of practice, venture capital gradually formed some effective, but not the same as the traditional non-venture capital enterprises of the game rules. China's 2005 "Company Law" for the traditional companies, this new outfit is indeed good. Traditional companies can do beats even if they are dancing in chains. However, for this innovative investment model of venture capital, this outfit is somewhat less fitting and appropriate. In order to circumvent the law, many of the alternative operations, become the investment link "unexploded" or "controversy source." The business game rules under the mode of venture capital will encounter the following legal environment awkwardRace and dilemma: 1. Human capital investment in the mode of venture capital, "the money to pay, a strong contribution." The investor is Bole, to its bullish Steed capital investment Wager, the main money, rarely participates in the enterprise daily concrete management. Entrepreneur is a steed, mainly to contribute. Investors mainly focus on the entrepreneurial spirit of innovation, risk-taking, CV qualification and diligent and dedicated human capital. In other words, the entrepreneur's "service commitment" is his primary contribution to the venture, with little or no cash contributions.　　The dual identities of the entrepreneur's shareholders and employees are competing. The method of financing approved by the company law is currency, or it is a non-monetary property which can be valued in currency and can be transferred by law. Because it is not good to use the currency valuation, also cannot transfer according to law, the labor service by "the company registers the management regulation" expressly prohibits as the company capital contribution method.　　Therefore, the common founder's human capital contribution under the "Company law" is very difficult to achieve. 2. Stock repurchase in the venture capital model, the investor's monetary contribution is usually a one-time investment in the start-up enterprise. However, the entrepreneur's human capital contribution is gradually put into the stage after the establishment of the start-up enterprise. The progress of the two parties ' contributions is inconsistent. In the start-up period, all the company's capital contribution is the investors ' money. After a number of years of continuous operation of the enterprise, the investor's human capital is gradually invested in place. Therefore, in order to prevent investors and entrepreneurs due to the unequal investment progress caused by the imbalance of interest, start-up enterprises usually have the right to buy shares of entrepreneurs.　　This usually includes: (1) The stock owned by the entrepreneur is linked to the service term of the entrepreneur and is usually divided into four-year maturity (vesting);(2) If the entrepreneur leaves the stock before maturity, the entrepreneur has the right to repurchase the immature stock held by the entrepreneur in nominal price. However, the equity repurchase rights of limited companies under the company law are limited to the "dissident shareholders" repurchase situation, in the case of "one of the following circumstances, shareholders who vote against the resolution of the shareholders ' meeting may request the company to acquire its shares at a reasonable price: (1) The company does not distribute profits to shareholders for five consecutive years, and the company is profitable for five consecutive years, and complies with the conditions of distribution of profits stipulated in this Law, (2) Merger, Division and transfer of the main property of the company; (3) The expiry of the business term stipulated in the Articles of association or other dissolution reasons as stipulated in the Articles of association, the meeting of the shareholders will adopt a resolution to amend the articles to survive the company. The repurchase rights of limited companies are limited to the company: (1) reducing the registered capital of the company, (2) merging with other companies holding the shares of the company, (3) rewarding the shares to the employees of the company, and (4) the shareholders are required to acquire their shares because of objections to the company's merger and division resolution made by the shareholders ' meeting.　　The common founder's stock repurchase system under the "Company law" is very difficult to realize under the VC model. In addition, in the VC model, investors will often require start-up companies to buy back their shares. Mainly based on: (1) venture capital fund has a certain period of existence. Before the expiry of the fund's lifetime, if the start-up enterpriseTo be unable to market or be merged by a third party, the venture capital fund will require the start-up enterprise to repurchase its shares to achieve exit; (2) In the case of gambling, if the start-up enterprises can not achieve the expected performance indicators, investors will also require the start-up companies to buy back their shares.　　It is also difficult to implement the repurchase system under the "Company law" in these VC models. 3. Employee stock incentives in the entrepreneurial investment model, in order to give full play to the enthusiasm, initiative and creativity of employees, binding employees and the long-term interests of the company, entrepreneurial enterprises usually implement employee stock incentive Plan (ESOP), mainly for options. The stock required for employee stock incentive is mainly derived from the stock or "stock Stock" reserved by the company under the "Authorized Equity system".　　In addition, the enterprise usually carry out stock incentive, even full shareholding. Then, employee stock incentive under the company law will have a series of restrictions. Includes: 1. Stock source. China's company law does not have the "authorized share capital" or "Inventory stock" system. The company law stipulates that companies can award shares to employees of the company by way of repurchase. However, such repurchase is subject to a series of strict restrictions, including (1) shall not exceed 5% of the total number of shares issued by the company, (2) The funds used for the acquisition shall be paid out of the company's after-tax profits and (3) the shares acquired shall be transferred to the employees within one year. The amount of these shares, the source of funds and the time limit of the transfer, leading to the incentive effect of start-up enterprises greatly reduced. 2. Motivate the number of people. China's "Company Law" stipulates that the number of shareholders of limited liability companies is below 50, the promoter of the company is two or more 200 persons. The incentive mode of employees ' large-area shareholding under the mode of venture capital is limited by company law.