Zhiheng News | The third phase of Zhiheng Chongqing Case Sharing Conference was successfully held
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On May 22, 2025, Guangdong Zhiheng (Chongqing) Law Firm (hereinafter referred to as "Zhiheng Chongqing") successfully held the third case sharing session of 2025. This sharing session specially invited lawyer Liu Taibo of our firm as the keynote speaker to conduct in-depth analysis on the theme of "Discussion on the Company's Equity Structure Design Scheme".
In this sharing session, lawyer Liu Taibo dismantled the design password from the five dimensions of family shareholding, foreign cooperation, employee shareholding, capital operation, and special shareholding arrangements (revolving shareholding, fund shareholding, and overseas shareholding structure), and detailed the advantages and disadvantages of various shareholding structure design schemes.
1
ZHIHENGCHONGQING
Family Holding: The Password to Wealth
Option 1
Advantages: simple structure
Insufficient:
1. It is easy to deny the personality of the legal person, and therefore bear joint and several liability for all debts of the company.
2. Financial Institution Groups generally require all shareholders to guarantee.
3. When distributing profits or occupying company A's funds for a long time, personal income tax needs to be paid.
Option two
Advantages: 1. Rational use of financial leverage; 2. Company A is a shareholding platform, does not carry out physical business activities, does not directly indebtedness, and reduces debt and tax risks.
Disadvantages: A one-person limited company needs to bear the burden of proof for independence.
Option three
Advantage:
1. Rational use of financial leverage.
2. Company A is a platform for holding shares, does not carry out physical business activities, does not directly indebted to external parties, and reduces debt and tax risks.
3. Personal guarantees may not be required.
4. Avoid the burden of proof of independence for a one-person limited company.
Option 4
Advantage:
1. Rational use of financial leverage.
2. Company A is a platform for holding shares, does not carry out physical business activities, does not directly indebted to external parties, and reduces debt and tax risks.
3. Personal guarantees may not be required.
4. Avoiding the burden of proof of independence for a one-person limited company
5. Through GP and LP, the shareholding ratio arrangement of company A and limited partnership enterprises reduces the income tax in inheritance, conceals the actual controller, protects family assets through risk isolation and other special purposes.
2
ZHIHENGCHONGQING
Strategic cooperation: small equity, big wisdom
Option 5
Advantages: simple structure
Insufficient:
1. Control issues, 67%, 51%, 34%, 30%, 20%, 10%, 5%, 1%.
2. When distributing profits or occupying company A's funds for a long time, personal income tax needs to be paid.
3. Financial Institution Groups generally require all shareholders to guarantee.
Option 6
Advantages: simple structure
1. Rational use of financial leverage.
2. Company A is a platform for holding shares, does not carry out physical business activities, does not directly indebted to external parties, and reduces debt and tax risks.
3. Personal guarantees may not be required.
4. According to actual needs, it can be used in combination with plans 3 and 4. All subsequent plans can be used in combination and will not be repeated.
Inadequacy: control issues, 67%, 51%, 34%, 30%, 20%, 10%, 5%, 1%.
3
ZHIHENGCHONGQING
Employee motivation: the transformation from "painting cakes" to "true fragrance"
Option 7
Advantages: By motivating core employees, a "benefit-sharing" mechanism has been realized, maintaining the stability of the workforce.
Insufficient:
1. Employees hold shares directly, and the company's control and voting rights may be decentralized, which is not conducive to some major decisions.
2. The number of shareholders is limited by the company law, and it cannot be operated when the number of incentive objects is large.
Option Eight
Advantage:
1. Through the incentive of core employees, a "benefit sharing" mechanism has been realized to maintain the stability of the workforce.
2. Through limited partnership shareholding, the control is still held by Zhang San, and employees actually enjoy the right to distribute dividends.
4
ZHIHENGCHONGQING
Capital operation: giving the company the wings to take off
Option 9
Advantages: By attracting investors, we can improve the company's capital structure and enhance its social influence.
Insufficient:
1. Limited companies are no longer suitable for the development of capital markets, and companies need share reform.
2. The company's management system, information disclosure, etc. are more standardized, which will increase certain costs.
3. If there is a betting agreement, shareholders may lose control if the conditions stipulated in the agreement are not met.
4. The company's voting rights may be decentralized.
Option 10
Advantage:
1. By attracting investors, improve the company's capital structure and enhance its social influence.
2. B joint-stock company does not directly participate in the operation of the entity, its main purpose is capital operation, transferring the liabilities, taxes, litigation and other risks of the entity's operation to the subsidiary, which is more in line with the needs of the capital markets.
Insufficient:
1. The company's management system and information disclosure are more standardized, which will increase certain costs.
2. If there is a betting agreement, shareholders may lose control if the conditions stipulated in the agreement are not met.
3. The company's voting rights may be decentralized.
5
ZHIHENGCHONGQING
Special Structure: The "Peach Blossom Land" of Wealth
Option 11
(1) Circular shareholding
Objective 1: Hiding the actual controller
Objective 2: "Inflate" capital and total assets through the circulation of funds.
Option 12
(2) Fund or trust holdings
Objective 1: To conceal the actual controller or investor
Objective 2: To resolve the issue of shareholder eligibility, such as civil servants and their close relatives.
Objective 3: Alternative shareholding arrangement to avoid the risk of shareholding
Objective 4: To protect personal property, because the fund or trust property is independent of the fund or trust company and the personal property of investors, the fund or trust property cannot be executed in principle.
Option XIII
(3) Overseas shareholding structure---Equity control model
The equity control model involves setting up offshore companies in the British Virgin Islands (BVI), Cayman Islands, and other places, using them to acquire domestic interests, and conducting private financing through the offshore company, ultimately achieving overseas listing.
Conclusion of the meeting
This sharing has helped us to deepen our research on equity design and incentive-related legal services, and to develop multi-dimensional thinking on how to help economic development from the perspective of lawyers. We have exchanged ideas with each other in a relaxed and pleasant atmosphere, and have benefited a lot. Let's continue to look forward to the next sharing together!
Attending the meeting
Lawyer Liu Taibo