CROWDFUNDING SYSTEMS: evaluation and government regulation in the conditions of reengineering

The emergence of new crowdfunding platforms in the Czech Republic is associated with new legislation regulating the activities of corporations. In particular, the Corporation Law was adopted in January 2014. It provided more flexibility in the management of companies, making it possible to develop financing through crowdinvesting in the prospective. Regarding the legal regulation of crowdfunding in the Czech Republic, investments in exchange for a share of profit or income received by a company or project are defined as a form of collective investment. This activity most closely matches the definition of an investment fund under the Act of management companies and investment funds or AMCIF. Investment Fund is a joint-stock company with its registered office in the Czech Republic or mutual fund (which is a set of tools and is not a legal entity) with the right to collect funds from the public by issuing shares or participation certificates and perform collective investment of the funds collected on the basis of investment strategies based on the principle of risk-sharing in favor of the holders of shares or participation certificates. An investment fund can either be managed by a management company, or exist in the form of an investment fund that has the right to manage itself, or exist in the form of an investment fund that is managed by its executive body. All three options (a management company, a self- managed investment fund, and an investment fund managed by an executive body) require obtaining a license from the Czech regulator, i.e. the National Bank of the Czech Republic. Alternatively, a crowdfunding platform can position itself as an intermediary for the direct sale of shares of individual companies to its investors, thereby avoiding the application of collective investment rules. According to this model, the platform still must be licensed by the National Bank of the Czech Republic as an investment firm, in particular, providing investment services. However, the use of this method imposes significant administrative restrictions on the corporate structure of target companies (for example, saving administrative costs effectively excludes target companies registered as limited liability companies). Crowdlending model also operates and accordingly is regulated in the Czech Republic. As of the end of 2017, there were 5 peer-to-peer lending platforms in this country. It is also important to note that every year in the Czech Republic more and more financial organizations are involved in cooperation with such platforms. Some platforms also offer investments in the form of mini-bonds. Mini-bonds are a form of debt that allows you to 96