Corporate Equity & Structure_Hunan Luheng Law Firm

SERVICES

Corporate Equity & Structure

We design stable and sustainable equity and control structures for enterprises at critical stages.

We solve core problems for SMEs during equity changes, transfers, financing and exit: unclear finances, ambiguous responsibilities and out-of-control risks.

Equity is not just about "shareholding percentage" — it is about who ultimately bears responsibility, holds control and assumes risk.

Suitable For

Enterprises undergoing or planning equity changes

Enterprises preparing to introduce investment, mergers or acquisitions

Enterprises with complex equity structures and unresolved historical issues

Enterprises expanding beyond the capacity of their original structure

Enterprises with chaotic share ratios and unclear control

Enterprises struggling with partner exits, valuation adjustments or share repurchases

Enterprises in a weak position during financing negotiations

We May Not Be Suitable For: Enterprises only seeking template-based, fast-track procedures; Enterprises making decisions based solely on cost; Enterprises unconcerned about long-term risks.
We do not pursue large-scale standardized services; instead, we focus long-term on equity and structural issues for SMEs.

How We Assist

We approach matters from three dimensions: corporate control, security and long-term development — not just share percentages.

Sort out existing equity and decision-making structures

Define control rights, veto rights and exit paths

Design entry and exit mechanisms for partners and investors

Coordinate equity incentives, shareholding platforms and governance arrangements

Prevent potential future equity disputes in advance

Service Outcomes

Stronger structure: Clear control and decision-making boundaries

Clearer paths: Predictable financing, incentives and exit routes

Controllable risks: Resolve disputes and conflicts upfront

Six Common Equity Pitfalls for Enterprises

Based on 10 years of serving SMEs, we repeatedly observe the following issues:

01.
Unclear financial records before equity changes

Historical accounts, intercompany payments and related-party transactions are not properly organized. Problems surface intensively during transfers or financing.
02.
Non-standard equity holding arrangements

Vague nominee shareholding agreements lead to inconsistent claims of rights and allocation of liabilities when disputes arise.
03.
Unbalanced equity ratio design

Founders dilute control too early or lack proper voting mechanisms, resulting in failed corporate governance.
04.
Equity incentives with form over risk control

Incentive agreements disconnected from articles of association and labor relations create hidden disputes instead of effective motivation.
05.
Lack of systematic equity risk review before financing or M&A

Overfocus on transaction price while ignoring long-term legal liabilities and historical risks.
06.
No pre-designed shareholder exit paths

Exits rely on personal relationships; once trust breaks down, the cost becomes extremely high.

Corporate Equity & Structure

Employment Risk Management

Corporate Debt & Restructuring

Full-Cycle Legal Support