Partnerships in China

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Partnerships in China

• -----New partnership law

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• 1. Brief introduction
• New partnership law was passed by Standing
  Committee of NPC in August,2006
• Character of New law
• ----include LP and LLP

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• ----partners individual, legal person,and
  other entities.
• ----no separate tax imposed on partnership
  entity
• ----apply to foreigners
• Encourage investment,deregulation,
• Contractual flexibility, improve efficiency

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• 2. Types of firms
• Stock Companies
• Close corporation
• General partnership
• Limited partnership(LP)
• Limited liability partnership(LLP)

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• Foreign enterprises
• ----Sino-foreign Equity JV
• ----Sino-foreign cooperative
• ----Foreign-owned enterprises
• ----FI joint stock limited companies

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• 3. General Partnership
• For small and professional firms, simple
  structure
• Partner may invest in service
• General partnership has to make registration.

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• Indicate GPin the title of the entity
• Partners have to have full capacity for civil
  conduct when the partnership set up
• Partners equally share profits, losses and
  controls

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• Partners are not permitted to request for
  distribution of the property before the
  liquidation
• Partnerships debts.
• ---- general provision
• ---- Partners admission and withdrawal
• ---- disbandment

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• 4. Special General Partnership(LLP)
• Only apply to professional entities
• Partners personally liable for business debts
• ----tort, wrongdoing
• Measures of replaceable remedies

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• 5. Limited partnership(LP)
• Limited liability for passive limited partners
• How many partners are permitted in the business?
• LP in title
• Limited partners duty to make contribution,not
  permitted to contribute in service

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• Limited partner does not participate in
  management
• LPs debts.
• ----general provision limited partners
  liable if participate in management
• ----limited partnersadmission and withdrawal
  
• ----disbandment
• Useful for venture capital funds

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• 6. Bankruptcy
• 7. Apply to foreigners