Financing itself is not illegal, but improper financing behavior may lead to illegal and criminal acts, such as illegal fund-raising and loan fraud.
Criminal law of the people's Republic of China
Article 192 The crime of fund-raising fraud refers to illegal fund-raising by fraudulent means for the purpose of illegal possession. If the amount is relatively large, it shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and shall also be fined not less than 20,000 yuan but not more than 200,000 yuan; If the amount is huge or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years, and shall also be fined not less than 50,000 yuan but not more than 500,000 yuan; If the amount is especially huge or there are other especially serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment, and shall also be fined not less than 50,000 yuan but not more than 500,000 yuan or confiscated property.
Article 193 The crime of loan fraud involves defrauding a bank or other financial institution of a loan for the purpose of illegal possession under any of the following circumstances. If the amount is relatively large, he shall be sentenced to fixed-term imprisonment of not more than five years or criminal detention, and shall also be fined not less than 20,000 yuan but not more than 200,000 yuan; If the amount is huge or there are other serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than five years but not more than ten years, and shall also be fined not less than 50,000 yuan but not more than 500,000 yuan; If the amount is especially huge or there are other especially serious circumstances, he shall be sentenced to fixed-term imprisonment of not less than 10 years or life imprisonment, and shall also be fined not less than 50,000 yuan but not more than 500,000 yuan or confiscated property:
(a) fabricating false reasons such as introducing funds and projects;
(two) the use of false economic contracts;
(3) using false documents;
(four) the use of false proof of property rights as a guarantee or repeated guarantee beyond the value of collateral;
(5) obtaining loans by other means.
Second, financing methods.
1. Bank loan. Banks are the main financing channels for enterprises. According to the nature of funds, it is divided into three categories: working capital loans, fixed assets loans and special loans. Special loans usually have specific purposes, and their loan interest rates are generally favorable. Loans are divided into credit loans, secured loans and discounted bills.
2. Stock financing. The stock is permanent, has no expiration date, does not need to be returned, and has no pressure to repay the principal and interest, so the financing risk is small. The stock market can promote enterprises to change their management mechanism and truly become a legal entity and market competition subject with independent operation, self-financing, self-development and self-restraint. At the same time, the stock market provides a broad stage for asset reorganization, optimizes the organizational structure of enterprises and improves the integration ability of enterprises.
3. Bond financing. Corporate bonds, also known as corporate bonds, are securities issued by enterprises in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time, indicating that there is a creditor-debtor relationship between the issuing enterprises and investors. Bondholders do not participate in the operation and management of the enterprise, but have the right to recover the agreed principal and interest on schedule. When an enterprise goes bankrupt and liquidates, creditors have priority over shareholders in claiming compensation for the remaining property of the enterprise. Corporate bonds, like stocks, are securities and can be freely transferred.
4. Financial leasing. Through the combination of financing and finance, financial leasing has the dual functions of finance and trade, and plays a very obvious role in improving the financing efficiency and promoting the technological progress of enterprises. Financial leasing includes direct purchase leasing, after-sale leaseback and leveraged leasing. In addition, there are many forms of leasing, such as the combination of leasing and compensation trade, the combination of leasing and processing and assembly, and the combination of leasing and underwriting. The financial leasing business has opened up a new financing channel for the technological transformation of enterprises, and adopted a new form of combining financing with finance, which has improved the speed of introducing production equipment and technology, saved the use of funds and improved the utilization rate of funds.
Characteristics and harm of illegal fund-raising
The main features of illegal fund-raising are as follows.
1. Not approved by relevant departments according to law. Including fund-raising approved by departments without approval authority and fund-raising approved by departments with ultra vires approval authority.
2. Promise to repay the principal and interest to investors within a certain period of time. Debt service includes not only monetary form, but also physical form or other forms.
3. Raise funds from unspecified social objects, namely the public.
4. Cover up the essence of illegal fund-raising in a legal form.
Illegal fund-raising activities have great social harm.
1, illegal fund-raising makes participants suffer economic losses. After illegal fund-raising criminals gather funds by deception, they squander, waste, transfer or illegally possess them. It is difficult for participants to recover the funds, or even lose all their money in serious cases.
2. Illegal fund-raising seriously interferes with the normal economic and financial order and easily leads to social risks.
3. Illegal fund-raising can easily lead to social instability and seriously affect social harmony. Illegal fund-raising often involves a large scale of fund-raising, a large number of people, a low proportion of funds turned over, and great difficulty in disposal, which easily leads to a large number of social security problems and seriously affects social stability.
The above knowledge is Bian Xiao's answer to the question "Is financing illegal?" Financing itself is not illegal, but improper financing behavior may lead to illegal crimes, such as illegal fund-raising and loan fraud.