In the recent 20 years, many leveraged buyout cases caused by private equity funds have become the most popular subjects in the international capital market. Asian capital market, Taiwanese included, is now the key focused investment area for the international private equity funds. Many people take a positive point of views about the phenomenon. But we cannot neglect the negative influence which it possibly brings. The paper, started from the discussion of private equity and leveraged buyout, has not only tried to investigate all sorts of problems derived from private equity funds operating leveraged buyout from 4 different perspectives-financial market, taxation, industry, fund itself and target company, but also makes efforts to collect rules and regulations of other countries as a guide-line for Taiwan. By conducting the structural analysis and submitting actual cases as a proof , the findings of this paper are expected to be helpful for the authorities to clarify the risk involved and to make relevant policies.