What kind of fund raising is legal?

Legitimate fund-raising means that companies, enterprises, organizations and individuals raise the required funds in the capital market in accordance with the conditions and procedures stipulated by relevant laws and regulations through public offering of securities or financial leasing, joint ventures, joint ventures and enterprise fund-raising.

For example, a joint stock limited company or a limited liability company issues shares or bonds to raise funds for the purpose of establishment or production and operation.

At present, there is no only quasi-statutory concept about illegal fund-raising, and the criminal law does not stipulate the crime of illegal fund-raising. According to the criminal law, the crimes related to illegal fund-raising include: the crime of illegally absorbing public deposits, the crime of fund-raising fraud and so on.

According to the Notice on Banning Illegal Financial Institutions and Illegal Financial Business Activities (Yinfa [1999] No.41):

"Illegal fund-raising" means that a unit or individual raises funds from the public by issuing stocks, bonds, lottery tickets, investment fund securities or other creditor's rights certificates without the approval of the relevant departments in accordance with legal procedures, and promises to repay the principal and interest to investors in cash, in kind or in other ways within a certain period of time.

Extended data

Illegal species

According to the relevant provisions of the Notice on Further Combating Illegal Fund Raising (Yinfa (1999) No.289), "illegal fund raising" can be summarized as follows:

(1) Absorb funds by issuing securities, membership cards or debt certificates.

(2) Divide real estate, real estate and other assets into equal parts, and raise funds at high interest rate by selling their shares;

(3) illegal fund-raising in the form of folk clubs;

(four) illegal fund-raising in the form of signing economic contracts such as commodity distribution;

(5) Issuing lottery tickets or issuing them in disguised form to raise funds;

(six) illegal fund-raising in the form of pyramid schemes or secret series;

(7) illegal fund-raising in the form of orchard or manor development.

It refers to the behavior that a unit or individual raises funds from the public by issuing stocks, bonds, lottery tickets, investment fund securities or other creditor's rights certificates without the approval of the relevant departments in accordance with legal procedures, and promises to repay the principal and interest to investors in the form of money, kind and other income within a certain period of time.

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