On the Legal Risks and Prevention of the Internet Public Offering in China

Abstract

Since 2012, the scale of China's equity financing has shown a rapid growth trend, which has aroused the attention of the regulatory authorities. This year NPC and CPPCC period and work report of the State Council, clearly put forward to carry out the pilot work of the public to raise equity to raise the public, enhance public service innovation ability, the development in China provides policy support for the public to raise equity. Public ownership will become an important part of China's multi-level capital market, providing a new financing channels for SMEs. However, the risk in the process of raising public equity financing can not be ignored; improper operation will damage the interests of the participants, and even affect the stability of the financial order. This paper first introduces the basic situation of the congregation to raise financing, including its classification, characteristics, operation mode and development status, and analysis and policy environment in China to raise public equity development economic environment, points out the necessity and obstacles in the development of the public to raise equity. Then, on the basis of the development environment and operating mechanism, the author systematically analyzes the risks faced by the participants. The congregation raised platform's legal status is not clear, facing the legal status of risk; risk of illegal issuance of shares of the company are the initiator and infringing intellectual property rights; investors face the moral risk, project risk, financing risk, valuation of excess stock holding risk and liquidity risk has a direct impact on the enthusiasm of investors to participate in the public equity raise. Finally, in order to improve the operation mechanism and process management, the public platform to improve the operational mechanism and process management, to prevent the risks involved in the financing process.