Backing the return to work: a Minton lawyer on financing for small and medium-sized enterprises

On the afternoon of 29 June 2021, at the invitation of the Shanghai Equity Exchange, Ma Jinbao of Shanghai Minton Law Firm attended a financial training session jointly organised by the Qingpu District Development and Reform Commission and the Shanghai Equity Exchange and hosted by the Qingpu Service Centre of the Shanghai Equity Exchange, where he gave a talk on "the practical process of corporate investment and mergers and acquisitions, and risk control". Leaders of Jinze Town in Qingpu district, leaders of the Shanghai Equity Exchange, leaders of its Qingpu Service Centre and the heads and some managers of outstanding enterprises in Jinze Town took part in the event.

Equity financing is one of the important means of financing available to a growing business and in recent years has become an option for many enterprises. Because small and medium-sized enterprises are not familiar with the basic process of equity financing or with what investment institutions look for, communication between institutions and enterprises seeking finance is often poor. The organisers held this event to spread knowledge of corporate financing and to help such enterprises attract potential investors to invest in them or acquire them.

Ma Jinbao gives a talk on finance to representatives of enterprises

Mr Ma began by setting out, from the perspective of an investor or acquirer, the basic process of investment and acquisition and the main tasks of the investor or acquirer and of the investee or target at each stage. He then focused, again from that perspective, on the legal risks commonly found in the matters a lawyer examines in due diligence, such as the target's legal status, its internal structure, related parties and related-party transactions, its assets, its staffing, and litigation and arbitration, together with suggestions for guarding against them. He stressed that an enterprise wishing to attract a good investment institution to invest in or acquire it must first operate lawfully and in accordance with the rules, standardise and observe its corporate governance rules and ensure that every part of its business runs compliantly, and must then understand the rules of the different levels of the capital market well enough to use equity financing and the other available means to grow, so as to reach the capital market as early as possible.

Finally, Mr Ma described the legal services a lawyer can provide in the course of corporate investment and acquisitions.