Is crowdfunding legal?

Legal analysis: Internet crowdfunding is an innovative model based on "Internet plus finance".

From the perspective of business and capital flow, crowdfunding model is actually a form of group purchase, which is essentially different from illegal fund-raising. All projects can't be returned by equity or capital, and the project sponsors can't promise any economic benefits to their supporters. They must be rewarded with goods, services or media content. Supporting a project is a purchase behavior, not an investment behavior, so it is legal.

At present, the mainstream crowdfunding in China is these two kinds. Product crowdfunding is a model of pre-sale and group purchase of goods, and you will get the goods after participation. Equity crowdfunding refers to the company selling a certain proportion of shares to ordinary investors, and investors get future income through investing in the company. This financing model based on internet channels is called equity crowdfunding. Another explanation is that "equity crowdfunding is the Internet of private equity".

Product crowdfunding: the sponsor initiates the project on the crowdfunding website and can go online after approval; Participants can get corresponding rewards for supporting products on crowdfunding websites.

Equity crowdfunding: the financing party initiates the project on the equity crowdfunding website and goes online after the review is completed; Investors invest in Taobao crowdfunding and JD.COM crowdfunding on equity crowdfunding websites.

Legal Basis: Interpretation of the Supreme People's Court on Several Issues Concerning the Specific Application of Laws in the Trial of Criminal Cases of Illegal Fund-raising Article 1 The act of absorbing funds from the public (including units and individuals) in violation of the national financial management laws shall be deemed as "illegally absorbing public deposits or absorbing public deposits in disguised form" as stipulated in Article 176 of the Criminal Law, unless otherwise stipulated in the Criminal Law:

(a) without the approval of the relevant departments according to law or in the form of borrowing legal business to absorb funds;

(two) through the media, promotion meetings, leaflets, mobile phone messages and other means to promote to the society;

(3) Commitment to repay the principal and interest or pay the return in the form of currency, material object or equity. In a certain period of time;

(four) to absorb funds from the public, that is, the social unspecified objects.

It is not illegal or disguised to absorb public deposits by absorbing funds from relatives, friends or units to specific objects without publicity to the society.