Order of the President of the People's Republic of China No.55 The Partnership Enterprise Law of the People's Republic of China has been amended and adopted at the 23rd session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on August 27,2006.The amended Partnership Enterprise Law of the People's Republic of China is hereby promulgated,and shall come into force as of June 1,2007. Hu Jintao,the President of the People's Republic of China August 27,2006. Partnership Enterprise Law of the People's Republic of China (Amended in 2006) (Adopted at the 24th session of the Standing Committee of the 8th National People's Congress on February 23,1997;amended at the 23rd session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on August 27,2006) Table of Contents Chapter I General Provisions Chapter II Common Partnership Enterprises Section 1 Establishment of a Partnership Enterprise Section 2 Property of a Partnership Enterprise Section 3 Execution of Partnership Affairs Section 4 Relationship between a Partnership Enterprise and a Third Person 中国投资指南 Section 5 Admission to and Withdrawal from a Partnership Section 6 Special Common Partnership Enterprises Invest in China Chapter III Limited Liability Partnership Enterprises Chapter IV Dissolution and Liquidation of Partnership Enterprises Chapter V Legal Liabilities Chapter VI Supplementary Provisions Chapter I General Provisions Article 1 The present law is formulated in order to regulate the acts of partnership enterprises,protect the legitimate rights and interests of partnership enterprises as well as their partners and creditors,maintain the social and economic order and promote the development of the socialist market economy. Article 2 The term "partnership enterprise"as mentioned in the present Law refers to the common partnership enterprises and limited liability partnership enterprises which are established within China by natural persons, legal persons and other organizations according to the present law. A common partnership enterprise comprises of common partners who bear unlimited and joint liabilities for the debts of the partnership enterprise.Where the present Law has any special provision on the way by which the common partners shall bear liabilities,these special provisions shall prevail. A limited liability partnership enterprise comprises of common partners and limited partners.The common partners shall bear unlimited and joint liabilities for the debts of the limited liability partnership enterprise, and the limited partners shall bear the liabilities for its debts to the extent of their capital contributions. Article 3 No wholly state-funded company,state-owned company,listed company,public-welfare-oriented institution or social organization may become a common partner. Article 4 The partnership agreement shall be concluded in written form and upon the consensus of all partners. Article 5 The principles of willingness,equality,fairness and good faith shall be followed in the conclusion
Order of the President of the People's Republic of China No. 55 The Partnership Enterprise Law of the People's Republic of China has been amended and adopted at the 23rd session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on August 27, 2006. The amended Partnership Enterprise Law of the People's Republic of China is hereby promulgated, and shall come into force as of June 1, 2007. Hu Jintao, the President of the People's Republic of China August 27, 2006. Partnership Enterprise Law of the People's Republic of China (Amended in 2006) (Adopted at the 24th session of the Standing Committee of the 8th National People's Congress on February 23, 1997; amended at the 23rd session of the Standing Committee of the 10th National People's Congress of the People's Republic of China on August 27, 2006) Table of Contents Chapter I General Provisions Chapter II Common Partnership Enterprises Section 1 Establishment of a Partnership Enterprise Section 2 Property of a Partnership Enterprise Section 3 Execution of Partnership Affairs Section 4 Relationship between a Partnership Enterprise and a Third Person Section 5 Admission to and Withdrawal from a Partnership Section 6 Special Common Partnership Enterprises Chapter III Limited Liability Partnership Enterprises Chapter IV Dissolution and Liquidation of Partnership Enterprises Chapter V Legal Liabilities Chapter VI Supplementary Provisions Chapter I General Provisions Article 1 The present law is formulated in order to regulate the acts of partnership enterprises, protect the legitimate rights and interests of partnership enterprises as well as their partners and creditors, maintain the social and economic order and promote the development of the socialist market economy. Article 2 The term "partnership enterprise" as mentioned in the present Law refers to the common partnership enterprises and limited liability partnership enterprises which are established within China by natural persons, legal persons and other organizations according to the present law. A common partnership enterprise comprises of common partners who bear unlimited and joint liabilities for the debts of the partnership enterprise. Where the present Law has any special provision on the way by which the common partners shall bear liabilities, these special provisions shall prevail. A limited liability partnership enterprise comprises of common partners and limited partners. The common partners shall bear unlimited and joint liabilities for the debts of the limited liability partnership enterprise, and the limited partners shall bear the liabilities for its debts to the extent of their capital contributions. Article 3 No wholly state-funded company, state-owned company, listed company, public-welfare-oriented institution or social organization may become a common partner. Article 4 The partnership agreement shall be concluded in written form and upon the consensus of all partners. Article 5 The principles of willingness, equality, fairness and good faith shall be followed in the conclusion
of a partnership agreement and in the establishment of a partnership enterprise. Article 6 As for the production and business operation incomes and other incomes of a partnership enterprise, the partners shall pay their respective income taxes according to the relevant taxation provisions of the state. Article 7 A partnership enterprise and its partners shall observe the laws,administrative regulations,social morals and commercial morals,and bear social liabilities. Article 8 The legitimate properties,rights and interests of a partnership enterprise and its partners are protected by law. Article 9 When applying for the establishment of a partnership enterprise,the applicant shall file with the enterprise registration organ a registration application,the partnership agreement,identity certificates of the partners and other documents. Where the business scope of a partnership enterprise contains any item that is subject to approval prior to registration according to laws or administrative regulations,such business shall be subject to approval according to law,and the approval document shall be submitted at the time of registration. Article 10 Where the registration application materials submitted by an applicant are complete and conform to the legal form,and the enterprise registration organ is able to complete the registration on the spot,the enterprise registration organ shall do so and shall issue a business license to the applicant. Except for the circumstance as described in the preceding Paragraph,the enterprise registration organ shall, within 20 days after it accepts an application,decide whether or not to register it.If it decides to register it,it shall issue a business license to the applicant,if it decides not to register it,it shall give a written reply to the applicant and make an explanation. Article 11 The date of issuance of the business license of a partnership enterprise shall be the date of establishment of the partnership enterprise. Before a partnership enterprise draws a business license,its partners may not engage in any partnership business in the name of a partnership enterprise. Article 12 Where a partnership enterprise intends to establish a branch,it shall go to the enterprise registration organ of the place where the to-be-established branch is located to apply for registration and obtain a business license. Article 13 Where any of the partnership enterprise registration items is changed,the partners executing the partnership affairs shall,within 15 days after they make the decision of change or after the cause of change occurs,apply to the enterprise registration organ for modifying the registration. Chapter II Common partnership Enterprises Section 1 Establishment of a Partnership Enterprise Article 14 To establish a partnership enterprise,the following conditions shall be met: (1)having two or more partners.If the partners are natural persons,they shall have complete civil capacity; (2)having a written partnership agreement; (3)having capital contributions subscribed to or actually paid by the partners; (4)having a name and a production and business operation place for the partnership enterprise;and (5)other conditions as prescribed by laws and administrative regulations. Article 15 The words "Common Partnership"shall be indicated in the name of a partnership enterprise Article 16 A partner may make capital contributions by currency,in kind,or by intellectual property right
of a partnership agreement and in the establishment of a partnership enterprise. Article 6 As for the production and business operation incomes and other incomes of a partnership enterprise, the partners shall pay their respective income taxes according to the relevant taxation provisions of the state. Article 7 A partnership enterprise and its partners shall observe the laws, administrative regulations, social morals and commercial morals, and bear social liabilities. Article 8 The legitimate properties, rights and interests of a partnership enterprise and its partners are protected by law. Article 9 When applying for the establishment of a partnership enterprise, the applicant shall file with the enterprise registration organ a registration application, the partnership agreement, identity certificates of the partners and other documents. Where the business scope of a partnership enterprise contains any item that is subject to approval prior to registration according to laws or administrative regulations, such business shall be subject to approval according to law, and the approval document shall be submitted at the time of registration. Article 10 Where the registration application materials submitted by an applicant are complete and conform to the legal form, and the enterprise registration organ is able to complete the registration on the spot, the enterprise registration organ shall do so and shall issue a business license to the applicant. Except for the circumstance as described in the preceding Paragraph, the enterprise registration organ shall, within 20 days after it accepts an application, decide whether or not to register it. If it decides to register it, it shall issue a business license to the applicant; if it decides not to register it, it shall give a written reply to the applicant and make an explanation. Article 11 The date of issuance of the business license of a partnership enterprise shall be the date of establishment of the partnership enterprise. Before a partnership enterprise draws a business license, its partners may not engage in any partnership business in the name of a partnership enterprise. Article 12 Where a partnership enterprise intends to establish a branch, it shall go to the enterprise registration organ of the place where the to-be-established branch is located to apply for registration and obtain a business license. Article 13 Where any of the partnership enterprise registration items is changed, the partners executing the partnership affairs shall, within 15 days after they make the decision of change or after the cause of change occurs, apply to the enterprise registration organ for modifying the registration. Chapter II Common partnership Enterprises Section 1 Establishment of a Partnership Enterprise Article 14 To establish a partnership enterprise, the following conditions shall be met: (1) having two or more partners. If the partners are natural persons, they shall have complete civil capacity; (2) having a written partnership agreement; (3) having capital contributions subscribed to or actually paid by the partners; (4) having a name and a production and business operation place for the partnership enterprise; and (5) other conditions as prescribed by laws and administrative regulations. Article 15 The words "Common Partnership" shall be indicated in the name of a partnership enterprise. Article 16 A partner may make capital contributions by currency, in kind, or by intellectual property right
land use right or other properties,or labor services. When a partner intends to make capital contributions in kind,by intellectual property right,land use right or other properties,if the prices thereof need to be assessed,the price may be determined by all partners through negotiation or may be assessed by a statutory assessment institution entrusted by all partners. Where a partner makes capital contributions by labor services,the assessment method shall be determined by all partners through negotiation,and shall be stated in the partnership agreement. Article 17 A partner shall fulfill the capital contribution obligation in light of the way and amount of capital contribution and the time limit for payment as stipulated in the partnership agreement. As for the capital contributions in non-monetary properties for which the formalities for the transfer of property right shall be gone through according to laws or administrative regulations,the partner shall go through the said formalities Article 18 The partnership agreement shall clearly state the following matters: (1)the name and address of the main business operation place of the partnership enterprise; (2)the purpose and business scope of the partnership; (3)the name and domicile of each partner; (4)the ways and amounts of capital contribution by partners and the time limits for payment, (5)the ways for profit distribution and loss sharing; (6)the execution of the partnership affairs; Chin (7)the admission to and withdrawal from the partnership; (8)the settlement of disputes; 中国投 10 (9)the dissolution and liquidation of the partnership enterprise;and Invest (10)the liabilities for breach of contract. Article 19 The partnership agreement shall become effective after all partners affix their signatures or seals to it.The partners shall,in light of the partnership agreement,enjoy their rights and perform their duties. The modification or supplement of a partnership agreement shall be subject to the unanimous consent of all partners,unless it is otherwise stipulated in the partnership agreement. The matters that are not stipulated or not clearly stipulated in the partnership agreement shall be decided by the partners through negotiation.In the case of failure of negotiation,they may be handled according to the present Law,other laws and administrative regulations. Section 2 Property of a Partnership Enterprise Article 20 All the capital contributions made by partners,the proceeds and other properties acquired in the name of the partnership shall be the properties of the partnership enterprise. Article 21 Prior to the liquidation of a partnership enterprise,no partner may request to divide the properties of the partnership enterprise,unless it is otherwise provided for in the present Law. Where a partner privately transfers or disposes the properties of a partnership enterprise prior to liquidation, the partnership enterprise may not challenge any third party with good faith. Article 22 When a partner transfers its entire or partial share of his properties in a partnership enterprise,he shall acquire the unanimous consent of all other partners,unless it is otherwise provided for in the partnership agreement. In the case of transfer of a partner'entire or partial share of properties in a partnership enterprise to another partner,the other partners shall be notified of this transfer
land use right or other properties, or labor services. When a partner intends to make capital contributions in kind, by intellectual property right, land use right or other properties, if the prices thereof need to be assessed, the price may be determined by all partners through negotiation or may be assessed by a statutory assessment institution entrusted by all partners. Where a partner makes capital contributions by labor services, the assessment method shall be determined by all partners through negotiation, and shall be stated in the partnership agreement. Article 17 A partner shall fulfill the capital contribution obligation in light of the way and amount of capital contribution and the time limit for payment as stipulated in the partnership agreement. As for the capital contributions in non-monetary properties for which the formalities for the transfer of property right shall be gone through according to laws or administrative regulations, the partner shall go through the said formalities. Article 18 The partnership agreement shall clearly state the following matters: (1) the name and address of the main business operation place of the partnership enterprise; (2) the purpose and business scope of the partnership; (3) the name and domicile of each partner; (4) the ways and amounts of capital contribution by partners and the time limits for payment; (5) the ways for profit distribution and loss sharing; (6) the execution of the partnership affairs; (7) the admission to and withdrawal from the partnership; (8) the settlement of disputes; (9) the dissolution and liquidation of the partnership enterprise; and (10) the liabilities for breach of contract. Article 19 The partnership agreement shall become effective after all partners affix their signatures or seals to it. The partners shall, in light of the partnership agreement, enjoy their rights and perform their duties. The modification or supplement of a partnership agreement shall be subject to the unanimous consent of all partners, unless it is otherwise stipulated in the partnership agreement. The matters that are not stipulated or not clearly stipulated in the partnership agreement shall be decided by the partners through negotiation. In the case of failure of negotiation, they may be handled according to the present Law, other laws and administrative regulations. Section 2 Property of a Partnership Enterprise Article 20 All the capital contributions made by partners, the proceeds and other properties acquired in the name of the partnership shall be the properties of the partnership enterprise. Article 21 Prior to the liquidation of a partnership enterprise, no partner may request to divide the properties of the partnership enterprise, unless it is otherwise provided for in the present Law. Where a partner privately transfers or disposes the properties of a partnership enterprise prior to liquidation, the partnership enterprise may not challenge any third party with good faith. Article 22 When a partner transfers its entire or partial share of his properties in a partnership enterprise, he shall acquire the unanimous consent of all other partners, unless it is otherwise provided for in the partnership agreement. In the case of transfer of a partner' entire or partial share of properties in a partnership enterprise to another partner, the other partners shall be notified of this transfer
Article 23 Where a partner intends to transfer his entire or partial share of properties in a partnership enterprise to a non-partner,the other partners have preemptive rights to purchase the properties under the same conditions,unless it is otherwise provided for in the partnership agreement. Article 24 Where a non-partner accepts a partner's share of properties in a partnership enterprise according to law,he becomes a partner of the partnership enterprise as soon as the partnership agreement is modified,and shall enjoy the rights and perform the obligations according to the present Law and the post-modification partnership agreement. Article 25 Where a partner puts his share of properties in the partnership enterprise in pledge,it shall acquire the unanimous consent of other partners.Without the unanimous consent of other partners,his act shall be invalidated.In case such an act results in any loss to the bona fide third party,the act doer shall assume the liabilities for compensation. Section 3 Execution of Partnership Affairs Article 26 The partners shall enjoy equal rights to the execution of partnership affairs. In accordance with the stipulations in the partnership agreement or upon the decision of all partners,one or several partners may be authorized to execute the partnership affairs on behalf of the partnership enterprise. Where a legal person partner or any other organization partner executes the partnership affairs,the representative it authorizes shall executes the partnership affairs. Article 27 Where one or several partners are entrusted to execute the partnership affairs according to Paragraph 2 of Article 26 of the present Law,the other partners may no longer execute the partnership affairs. The partners,who do not execute the partnership affairs,shall have the right to supervise the execution of the partnership affairs. Article 28 Where one or several partners execute the partnership affairs,they shall regularly report to the other partners the conditions on the execution of relevant affairs,the business operations and financial status of the partnership enterprise.The proceeds derived from the execution of the partnership affairs shall attribute to the partnership enterprise,and the expenses and losses incurred from it shall be paid by the partnership enterprise .na In order to know the conditions on the business operation and financial status of the partnership enterprise,the partners shall have the right to inquire the account books and other financial materials of the partnership enterprise st Article 29 Where each partner execute the partnership affairs respectively,the affair-executing partners may raise objections to the affairs executed by other partners.When raising objections,the execution of such affairs shall be suspended temporarily.In case any dispute arises,a decision shall be made according to Article 30 of the present Law. Where a partner,entrusted to execute the partnership affairs,fails to execute the partnership affairs according to the partnership agreement or the decision of all partners,the other partners may decide to revoke the entrustment. Article 30 The partners shall make a resolution on the relevant matters of the partnership enterprise,and shall handle them by voting as stipulated in the partnership agreement.If it is not stipulated or not clearly stipulated in the partnership agreement,the voting method of"one partner,one vote"and "pass upon more than half of the votes of all partners"shall be adopted. If it is otherwise provided for in the present Law for the voting method of a partnership enterprise,thee
Article 23 Where a partner intends to transfer his entire or partial share of properties in a partnership enterprise to a non-partner, the other partners have preemptive rights to purchase the properties under the same conditions, unless it is otherwise provided for in the partnership agreement. Article 24 Where a non-partner accepts a partner's share of properties in a partnership enterprise according to law, he becomes a partner of the partnership enterprise as soon as the partnership agreement is modified, and shall enjoy the rights and perform the obligations according to the present Law and the post-modification partnership agreement. Article 25 Where a partner puts his share of properties in the partnership enterprise in pledge, it shall acquire the unanimous consent of other partners. Without the unanimous consent of other partners, his act shall be invalidated. In case such an act results in any loss to the bona fide third party, the act doer shall assume the liabilities for compensation. Section 3 Execution of Partnership Affairs Article 26 The partners shall enjoy equal rights to the execution of partnership affairs. In accordance with the stipulations in the partnership agreement or upon the decision of all partners, one or several partners may be authorized to execute the partnership affairs on behalf of the partnership enterprise. Where a legal person partner or any other organization partner executes the partnership affairs, the representative it authorizes shall executes the partnership affairs. Article 27 Where one or several partners are entrusted to execute the partnership affairs according to Paragraph 2 of Article 26 of the present Law, the other partners may no longer execute the partnership affairs. The partners, who do not execute the partnership affairs, shall have the right to supervise the execution of the partnership affairs. Article 28 Where one or several partners execute the partnership affairs, they shall regularly report to the other partners the conditions on the execution of relevant affairs, the business operations and financial status of the partnership enterprise. The proceeds derived from the execution of the partnership affairs shall attribute to the partnership enterprise, and the expenses and losses incurred from it shall be paid by the partnership enterprise. In order to know the conditions on the business operation and financial status of the partnership enterprise, the partners shall have the right to inquire the account books and other financial materials of the partnership enterprise. Article 29 Where each partner execute the partnership affairs respectively, the affair-executing partners may raise objections to the affairs executed by other partners. When raising objections, the execution of such affairs shall be suspended temporarily. In case any dispute arises, a decision shall be made according to Article 30 of the present Law. Where a partner, entrusted to execute the partnership affairs, fails to execute the partnership affairs according to the partnership agreement or the decision of all partners, the other partners may decide to revoke the entrustment. Article 30 The partners shall make a resolution on the relevant matters of the partnership enterprise, and shall handle them by voting as stipulated in the partnership agreement. If it is not stipulated or not clearly stipulated in the partnership agreement, the voting method of "one partner, one vote" and "pass upon more than half of the votes of all partners" shall be adopted. If it is otherwise provided for in the present Law for the voting method of a partnership enterprise, thee
provisions shall prevail. Article 31 Unless it is otherwise prescribed in the partnership agreement,the following items of a partnership enterprise shall be subject to the unanimous consent of all partners: (1)changing the name of the partnership enterprise; (2)changing the business scope and the address of the main business place of the partnership enterprise; (3)disposing of the real property of the partnership enterprise; (4)transferring or disposing of the intellectual property and other property rights of the partnership enterprise; (5)providing guarantees to others in the name of the partnership enterprise,and (6)hiring a non-partner to act as a business manager of the partnership enterprise Article 32 No partner may,solely or jointly with others,operate any business competing with the partnership enterprise. Unless it is otherwise prescribed in the partnership agreement or is unanimously approved by all partners,no partner may have any trade with the partnership enterprise. No partner may engage in any activity that may impair the interests of the partnership enterprise. Article 33 The distribution of profits or share of losses of the partnership enterprise shall follow the stipulations in the partnership agreement.In case it is not stipulated or not clearly stipulated in the partnership agreement,a decision shall be made by the partners through negotiation.In case it is failed to conclude any negotiation,the distribution of profits or share of losses shall be made in proportion to the actual capital contributions made by the partners.In case it is unable to determine the proportions of capital contributions, the profits or losses shall be distributed or shared equally by the partners. It shall not be stipulated in the partnership agreement that all profits will be distributed to only part of the partners or that part of the partners will bear all losses. Article 34 The partners may,in accordance with the stipulations in the partnership agreement or the decision of all partners,increase or decrease their capital contributions to the partnership enterprise. Article 35 A business manager hired by the partnership enterprise shall perform his duties within the scope authorized by the partnership enterprise. 2 Where a business manager hired by the partnership enterprise performs his duties beyond the scope authorized by the partnership enterprise,or he brings any loss to the partnership enterprise because of his intentional or serious fault,he shall be liable for compensation according to law. Article 36 The partnership enterprise shall,according to laws and administrative regulations,establish an enterprise financial and accounting system. Section 4 Relationship between a Partnership Enterprise and a Third Person Article 37 The restrictions of a partnership enterprise on the partners'execution of partnership affairs as well as on their rights to represent the partnership enterprise in the face of outsiders shall not challenge any bona fide third party. Article 38 As for its debts,the partnership enterprise shall first pay with all of its properties. Article 39 Where a partnership enterprise fails to discharge any mature debt,the partners shall bear unlimited joint liabilities. Article 40 Where the amount of payment made by a partner exceeds the loss-sharing proportion as prescribed in Paragraph I of Article 33 of the present Law since he bears unlimited and joint liabilities,he shall have right to demand the other partners to make reimbursements
provisions shall prevail. Article 31 Unless it is otherwise prescribed in the partnership agreement, the following items of a partnership enterprise shall be subject to the unanimous consent of all partners: (1) changing the name of the partnership enterprise; (2) changing the business scope and the address of the main business place of the partnership enterprise; (3) disposing of the real property of the partnership enterprise; (4) transferring or disposing of the intellectual property and other property rights of the partnership enterprise; (5) providing guarantees to others in the name of the partnership enterprise; and (6) hiring a non-partner to act as a business manager of the partnership enterprise. Article 32 No partner may, solely or jointly with others, operate any business competing with the partnership enterprise. Unless it is otherwise prescribed in the partnership agreement or is unanimously approved by all partners, no partner may have any trade with the partnership enterprise. No partner may engage in any activity that may impair the interests of the partnership enterprise. Article 33 The distribution of profits or share of losses of the partnership enterprise shall follow the stipulations in the partnership agreement. In case it is not stipulated or not clearly stipulated in the partnership agreement, a decision shall be made by the partners through negotiation. In case it is failed to conclude any negotiation, the distribution of profits or share of losses shall be made in proportion to the actual capital contributions made by the partners. In case it is unable to determine the proportions of capital contributions, the profits or losses shall be distributed or shared equally by the partners. It shall not be stipulated in the partnership agreement that all profits will be distributed to only part of the partners or that part of the partners will bear all losses. Article 34 The partners may, in accordance with the stipulations in the partnership agreement or the decision of all partners, increase or decrease their capital contributions to the partnership enterprise. Article 35 A business manager hired by the partnership enterprise shall perform his duties within the scope authorized by the partnership enterprise. Where a business manager hired by the partnership enterprise performs his duties beyond the scope authorized by the partnership enterprise, or he brings any loss to the partnership enterprise because of his intentional or serious fault, he shall be liable for compensation according to law. Article 36 The partnership enterprise shall, according to laws and administrative regulations, establish an enterprise financial and accounting system. Section 4 Relationship between a Partnership Enterprise and a Third Person Article 37 The restrictions of a partnership enterprise on the partners' execution of partnership affairs as well as on their rights to represent the partnership enterprise in the face of outsiders shall not challenge any bona fide third party. Article 38 As for its debts, the partnership enterprise shall first pay with all of its properties. Article 39 Where a partnership enterprise fails to discharge any mature debt, the partners shall bear unlimited joint liabilities. Article 40 Where the amount of payment made by a partner exceeds the loss-sharing proportion as prescribed in Paragraph 1 of Article 33 of the present Law since he bears unlimited and joint liabilities, he shall have right to demand the other partners to make reimbursements