Analysis on the Ownership Structure of China Family Business

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Since the reform and opening up, China's private economy has developed like mushrooms after rain, and now it involves almost all industries, and 90% of private enterprises in China are family businesses, so whether the ownership structure is reasonable is the key to restrict and promote the development of enterprises. This paper analyzes and expounds the main types of ownership structure of family enterprises, and puts forward some reasonable suggestions.

What is a family business? Chandler, a famous American business historian, defines family as "the founder and his closest partner have always held most of the shares." They maintain close personal relations with managers and retain the main decision-making power of senior management, especially in financial policy, resource allocation and selection of senior personnel. "In fact, in short, the family business includes two parts, one is the family-owned enterprise, and the other is the family-controlled enterprise. Family business is a form of enterprise organization in the world. More than 80% of enterprises in the world belong to family businesses, including Wal-Mart, Ford, Samsung, LG and many other famous big companies. After China's reform and opening up, a large number of family businesses have mushroomed. 1992, Deng Xiaoping Southern Talk was published, and the family business entered a period of rapid development, with unprecedented expansion of family power. Family business began to pursue scale effect and industry leading to become bigger and stronger. However, with the rapid expansion of assets, the contradiction of interest division within enterprises has become more and more serious, and property rights issues have begun to surface. At the same time, the wind of property rights reorganization and enterprise restructuring prevailed. Equity has become the lifeblood of family business, so we must know the equity structure of family business.

I. Types and Examples of Ownership Structure of Family Enterprises

1. Family members * * * jointly invest to set up an enterprise, and their equity rights shall be defined at the beginning or during the establishment. Liu four brothers's Hope Group is this type. From 65438 to 0982, Liu four brothers started from the feed industry and gradually set foot in food, electronics, finance, real estate, commerce and other fields. At present, it has become the largest family business in China. 1July, 983, the Liu brothers decided the future distribution according to the investment situation. The third company invested the most, accounting for the most shares, followed by the second, and the boss and the fourth company tied for third place. After 1992, I hope to make two adjustments. A single enterprise is divided into four enterprise groups, and the boss invests to create the hope of the mainland. The second established the East Hope based on the Northeast; The third is the hope of establishing West China; Fourth, build the hope of the south on the basis of the southern region. They also own "two factories and one factory", namely Xinjin Feed Factory, Hope Food Co., Ltd. and Hope Science and Technology Research Institute, each holding 1/4 shares. At this point, Hope Group has basically completed the process of clarifying property rights. This move solved the differences and differences between brothers in business philosophy and investment direction, and also eliminated the confusion caused by double decision-making and cross-operation, which promoted the progress and development of the enterprise.

2. One person in the family business first created the business and gradually recruited family members to join. For example, Nan Cunhui's Zheng Tai Group. On the road of Zheng Tai's development, family control and equity have always been the concerns of Nan Cunhui. 199 1 year, Nan Cunhui raised funds from his wife and younger brother Huang 15000 US dollars to establish Wenzhou Electric Co., Ltd., a Sino-US joint venture. In Nanjia, many people are engaged in low-voltage electrical appliances and have certain production, management and capital, but more importantly, Nanjia. Nan Cunhui bought shares from nine family members, forming a business management centered on family members. Among these nine people are his brother Nan Cunfei, nephew Zhu Xinmin and brother-in-law Wu Bingchi. Family members' share participation has expanded the capital of enterprises and solved the problem of lack of funds and talents.

3. Due to the policy changes of local governments, the ownership structure has changed. Such as the equity acquired by Wanxiang Group due to restructuring. 1969, Lu took over the township enterprise "Ningwei Commune Agricultural Machinery Repair Factory", which is the prototype of Wanxiang Group. By 1988, Wanxiang Group has developed for more than ten years, and its assets have reached more than 500 million yuan. Lu bought out the equity of Wanxiang Shaft Factory from Ningwei Town Government at a price of/kloc-0.5 million yuan, which made the town government fade out of the leading role. According to the spirit of the document at that time, after the equity reform, Wanxiang Group has more independent management rights, and can set development goals more flexibly, thus gaining more vitality and laying a solid foundation for its rapid development. Now Wanxiang Group has become a comprehensive diversified investment group, and its operating income in 2002 reached 654.38+065.438+08 billion yuan.

4. In order to make full use of all kinds of relationships, family businesses actively integrate into the shares of the government and other forces. For example, Tiantong, Zhejiang Tiantong took the initiative to let the government share a piece of the action in 199 1 to speed up the development of enterprises. In August of the same year, the government of Guodian Town of Haining City became the largest shareholder of Tiantong, holding 36.29%. This "red state" quickly enabled the enterprise to successfully obtain the title of "National Key Support High-tech Enterprise", and the enterprise income tax was changed from 33% to 6544. Although the sons of Pan Shi and Tiantong sold some shares, they gained more valuable opportunities for enterprise development. 200 1, Zhejiang Tiantong Co., Ltd. successfully listed and issued A shares on the Shanghai Stock Exchange, becoming the first A-share listed company controlled by a natural person in China. Similarly, Galanz, Midea Group, etc. , have taken the initiative to include the shares of the local government, in order to obtain greater development.

5, the family company into a listed company. On June 8th, 20001year, Taitai Pharmaceutical was listed on the Shanghai Stock Exchange. This time, Taitai Pharmaceutical issued 70 million A shares, with a total share capital of 2710.08 million shares, and five sponsors accounted for 74 18%. These five promoters belonged to the same family business before listing. The largest shareholder and ultimate shareholder of Shenzhen Baiyeyuan holding 48.96% of the shares is Zhu, the chairman of Taitai Pharmaceutical, accounting for 90% of the shares, and his wife and vice chairman Liu account for 65,438+00% of the shares. The second largest shareholder and ultimate shareholder holding 18.54% shares in Hong Kong is Zhu's mother, accounting for 99.9% of the shares; The other three major shareholders, each accounting for 2.25%, are either a "couple shop" opened by Zhu and Liu, or a joint venture between Zhu's brother Zhu Baoan and Liu's uncle and sister-in-law. The stock market has made Mrs. Pharmaceutical reach an unprecedented peak of wealth. Taitai Pharmaceutical raised 654.38+07 billion yuan at one time, while Chairman Zhu was worth about 5.3 billion yuan, and the market value of property controlled by family members reached 8.4 billion yuan on the day of listing. In addition to Taitai Pharmaceutical, which is listed in A-share market, Xian Di Group, a family business that is also an industry leader, also focuses on stock listing. The difference is that its target is the B-share market. In August 2000, with the formal approval of the issuance examination committee of the State Securities Regulatory Commission, Xian Di listed and issued 654.38+0.5 billion B shares, and in September, Xian Di B was listed and traded on the Shenzhen Stock Exchange. The listing of family business not only broadens the financing channels, but also enables the company to raise a large amount of development funds in a short time. On the other hand, it also makes the transfer of equity more convenient and flexible, which should be the future development direction of family business.

Second, the development trend of family businesses in China

At present, the distribution of shares in China family enterprises among family members is that the main entrepreneur holds the largest share and serves as the chairman, while other family members, usually immediate family members, hold the rest. For example, Zhejiang Guangtong, Galanz, Midea, Xian Di and Tai are all controlled by father and son. However, with the development of family business, the equity of family members will tend to be decentralized and externalized, which is actually dominated by objective requirements. For example, the transfer of equity to operators and employees will help improve the governance structure of family businesses and enhance employees' enthusiasm and loyalty to the business. On the other hand, when the company goes public or issues shares again to raise funds, the shares owned by family members will also be diluted.

The family business in China is still in the stage of rapid growth. How to form a reasonable shareholding structure is a key issue that every enterprise should consider. Only by clarifying the property right relationship and building an effective governance structure can enterprises go into battle lightly and develop faster. Therefore, it is necessary to learn from the successful experience of successful enterprises in the construction of equity structure, and constantly explore and summarize in practice. (□ Text/Li Xingang)