What are the types of equity investments?

Equity investment is usually for long-term (at least more than one year) holding a company** or long-term investment in a company, in order to achieve control of the investee, or exert significant influence on the investee, or to establish a close relationship with the investee to diversify the business risk. If the investee is in poor operating condition or goes into bankruptcy liquidation, the investee, as a shareholder, also needs to bear the corresponding investment losses. Equity investment usually has the characteristics of large investment, long investment period, high risk and can bring greater benefits to the enterprise.

The profit margin of equity investment is quite broad, one is the dividend of the enterprise, and the other is that once the enterprise is listed, there will be more generous returns. At the same time, you can also enjoy a series of preferential measures such as allotment and share gift. There are four types of equity investments:

1) Control refers to the right to determine the financial and operational policies of an enterprise, and to obtain benefits from the business activities of the enterprise. (2) Joint control refers to the common control of a certain economic activity as agreed in the contract. (3) Significant influence refers to having the power to participate in the decision-making of an enterprise's financial and operational policies, but does not determine these policies.

4) No control, no common control, and no significant impact.

There are four types of private equity investment** in China:

First, it is a dedicated independent investment** with diversified funds**;

the second is the investment under the large diversified financial institutions**;

Third, after the promulgation of the regulations on Sino-foreign joint venture industrial investment, some newly established private equity investment**;

Fourth, the investment of large enterprises, this kind of investment serves the development strategy and investment portfolio of the group, and the funds are within the group.

Types of equity investments include control, joint control, significant influence, and no control. Equity investment is the act of investing in the purchase of equity in a company for the purpose of participating in or controlling its business activities. It can occur in the open trading market, or it can occur in the case of the initiation and establishment of the company or the establishment of the fundraising, and it can also occur in the case of the non-public transfer of shares.

[Legal basis].Article 71 of the Company Law of the People's Republic of China.

The shareholders of a limited liability company may transfer all or part of their equity to each other.

The transfer of equity by a shareholder to a person other than the shareholder shall be subject to the consent of more than half of the other shareholders. Shareholders shall notify other shareholders in writing to solicit consent for their equity transfer, and if other shareholders do not reply within 30 days from the date of receipt of the written notice, they shall be deemed to have agreed to the transfer. If more than half of the other shareholders do not agree to the transfer, the shareholders who do not agree shall purchase the transferred equity; If you do not purchase it, you will be deemed to have agreed to the transfer.

For the equity transferred with the consent of the shareholders, under the same conditions, other shareholders have the right of first refusal. If two or more shareholders claim to exercise the right of first refusal, they shall negotiate to determine their respective purchase ratios; If the negotiation fails, the right of first refusal shall be exercised in accordance with the proportion of their respective capital contributions at the time of transfer.

Where the articles of association of the company have other provisions on the transfer of equity, such provisions shall prevail.