Company and partnershipCompanyPartnershipPropertyPersonaltrustBasisofrelationshipLegal statusLegal personNonlegalpersonPropertyownershipCompanyPartnersLimited liabilitynoyesScaleBiggerSmaller
Company and partnership Company Partnership Basis of relationship Legal status Property ownership Limited liability Scale Property Personal trust Legal person Non legal person Company Partners Bigger Smaller yes no
4.1.4TypesofcompaniesIncompliancewithChina'sCompanyLaw,themaintypes ofcompaniesare limitedliabilitycompaniesand joint-stocklimitedcompanies,whichcomprisethevastmajorityofcorporateentitiesinChinaBut companies couldalsobeseenfromotherperspectives;someconceptsneedstobeclarified.LimitedLiabilityCompany&JointStockLimitedCompanyParentCompany&SubsidiarycompanyHeadcompany&branch
4.1.4 Types of companies In compliance with China's Company Law, the main types of companies are limited liability companies and joint-stock limited companies, which comprise the vast majority of corporate entities in China. But companies could also be seen from other perspectives; some concepts needs to be clarified. Limited Liability Company & Joint Stock Limited Company Parent Company & Subsidiary company Head company & branch
Limited Liability Company& Joint Stock Limited CompanyLimitedLiabilityCompany---(LLC)Joint Stock Limited Company/Company limited by shares---JSLC/CLS。TheLLC ismainlydesignedforsmall andmedium-sizedenterprises,andtheJSLCaimsatbigfirms.。TheLLCis requiredto incorporatethewords"limited liabilitycompany"intoitsname,whileJSLCisrequired toincorporatethewords“Joint StockLimitedCompany"intoit.TheLLC'shareholdersassumeliabilitytowardsthecompanytotheextentofthe amount of capitaltheyhave contributed into it,whilethe JSLC'sshareholders assumeliabilitytowardsthecompanyuptotheamountofsharesthey hold
Limited Liability Company& Joint Stock Limited Company ◦ Limited Liability Company-(LLC) ◦ Joint Stock Limited Company/Company limited by shares -JSLC/CLS ◦ The LLC is mainly designed for small and medium-sized enterprises, and the JSLC aims at big firms. ◦ The LLC is required to incorporate the words “ limited liability company ”into its name, while JSLC is required to incorporate the words “Joint Stock Limited Company ” into it. ◦ The LLC’ shareholders assume liability towards the company to the extent of the amount of capital they have contributed into it, while the JSLC’s shareholders assume liability towards the company up to the amount of shares they hold
ParentCompany&Subsidiarycompany。Theparent companyis thecontrolling orholding company.ThesubsidiarymustsatisfyalltherequirementsofCLSorLLCandgo through theprocedures of company formation.It enjoys legalpersonstatus and bear civil liabilities independently,though itiscontrolledbyothercompaniesintermsofcapital.Itenjoysthedecision-making power ofanindependent company,andis equalwiththeparentcompanybeforethelaw.COMPANYA%ParentComparySharesOwned100%75%25%COMPANYBCOMPANY CCOMPANYDWholyOwnedSubsidiaryPartlyOwned SubsidiaryEqutyInvestment
Parent Company & Subsidiary company ◦ The parent company is the controlling or holding company. ◦ The subsidiary must satisfy all the requirements of CLS or LLC and go through the procedures of company formation. It enjoys legal person status and bear civil liabilities independently, though it is controlled by other companies in terms of capital. It enjoys the decision-making power of an independent company, and is equal with the parent company before the law
Head companyand branch。The head company is the general bodygoverning the entire organizations ofthecompany,whilethebranchismerely anoffshoot of theheadcompany.Thehead company mayhaveBranchnumerous branches as long as itsbusiness sorequiresanditisabletoBranmaintainthemCorporateBranchdoesnotenjoylegal personstatus and its civil liabilities areBranchassumed by thehead company
Head company and branch ◦ The head company is the general body governing the entire organizations of the company, while the branch is merely an offshoot of the head company. The head company may have numerous branches as long as its business so requires and it is able to maintain them. ◦ Branch does not enjoy legal person status and its civil liabilities are assumed by the head company