AccordingtothePartnershipLaw,partnerships inChinaincludeoGeneralpartnershipSpecializedgeneralpartnershipLimitedliabilitypartnershipTheformsof partnerships established underChinesepartnershiplawdifferfromthoseincommonlawjurisdictionsEg.:IntheUS,limitedliabilitypartnership(LLP),limitedpartnership(LLP)limitedliabilitylimitedpartnership(LLLP)
According to the Partnership Law, partnerships in China include ◦ General partnership ◦ Specialized general partnership ◦ Limited liability partnership The forms of partnerships established under Chinese partnership law differ from those in common law jurisdictions. ◦ Eg.：In the US, limited liability partnership(LLP), limited partnership(LLP), limited liability limited partnership(LLLP)
3.1.1GeneralPartnershipWhatisageneralpartnership?Ageneralpartnershipisthebasicformofpartnership,whichiscomposedofgenerapartnerswhobearunlimited jointandseveral liabilityforthedebtsofthepartnershipEachgeneral partnerhasunlimited personal liabilityforthedebts and obligations ofthebusiness.。GeneralpartnersareoftencalledGP
3.1.1 General Partnership What is a general partnership? ◦ A general partnership is the basic form of partnership, which is composed of general partners who bear unlimited joint and several liability for the debts of the partnership. ◦ Each general partner has unlimited personal liability for the debts and obligations of the business. ◦ General partners are often called GP
Case:A,togetherwithhisneighborsBandC,eachcontributed500,o00yuantojointlyestablishtheDadiGeneralPartnership,agreeingtosharebothprofitsandlossesinproportiontotheircapitalcontributions.Duetopoormanagement,thecompany incurredadebtof1millionyuanandwasunabletorepayit.Thefollowingdebtrepaymentsoccurred:TheDadiGeneralPartnershiprepaid700,oo0yuanusingitsassets,but300,000yuanofdebtremainedWillthecreditorgettheremained300,000?ThecreditordiscoveredthatChadtheabilitytorepayanddemandedthatCtakeresponsibilityfortheremaining300,000yuandebt.ShouldAandBberesponsiblefortheremainingdebt?Afterbearingthefullrepaymentresponsibility,C,feelingaggrieved,soughtreimbursementof100,000yuaneachfromAandB
Case: A, together with his neighbors B and C, each contributed 500,000 yuan to jointly establish the Dadi General Partnership, agreeing to share both profits and losses in proportion to their capital contributions. Due to poor management, the company incurred a debt of 1 million yuan and was unable to repay it. The following debt repayments occurred: The Dadi General Partnership repaid 700,000 yuan using its assets, but 300,000 yuan of debt remained. Will the creditor get the remained 300,000? The creditor discovered that C had the ability to repay and demanded that C take responsibility for the remaining 300,000 yuan debt. Should A and B be responsible for the remaining debt? After bearing the full repayment responsibility, C, feeling aggrieved, sought reimbursement of 100,000 yuan each from A and B
Characteristicsofageneralpartnership(1)Twoormorepartners(withnoupperlimitonthenumberofpartners,whoareallgeneralpartners.Thepartnershavetherighttomakeallthemanagementdecisionsforthebusiness.Alltheprofitsofthebusinessaresharedbythepartners.(2)EachgeneralpartnerbearsunlimitedjointandseveralliabilityforthedebtsJoint liabilitymeansall partnersareresponsibleforaparticularobligationordebt,totheextentthat eachpartycanbeheld individuallyliablefortheentireamountowed.Several liabilitymeansapartnerwhohaspaidmorethanhisshareofthelosses shall beentitledtorecourseagainstotherpartners.Recourse:thelegal remediesoroptionsavailabletoapersonwhohassufferedalossorharmduetoanotherperson'sactionsoromissions.Itessentiallyprovidesameanstoseekcompensationorredressforthewrong done.(3)Partnershavetheflexibilitytocontributecapitalinvariousforms,includingcash,inkindassets(suchasmachineryandequipment,rawmaterials,components,etc.),intellectualproperty,landuserights,otherpropertyrights,orlaborservices
Characteristics of a general partnership (1) Two or more partners(with no upper limit on the number of partners, who are all general partners. The partners have the right to make all the management decisions for the business. All the profits of the business are shared by the partners. (2) Each general partner bears unlimited joint and several liability for the debts. ◦ Joint liability means all partners are responsible for a particular obligation or debt, to the extent that each party can be held individually liable for the entire amount owed. ◦ Several liability means a partner who has paid more than his share of the losses shall be entitled to recourse against other partners. ◦ Recourse: the legal remedies or options available to a person who has suffered a loss or harm due to another person's actions or omissions. It essentially provides a means to seek compensation or redress for the wrong done. (3) Partners have the flexibility to contribute capital in various forms, including cash, inkind assets(such as machinery and equipment, raw materials, components, etc.), intellectual property, land use rights, other property rights, or labor services
SpecializedGeneralPartnershipWhat is a specialized general partnership?Aspecializedgeneral partnershipisatype ofgeneralpartnershipwhichisaprofessionalentitythatprovides paidservicestoits clients withspecializedknowledgeandskills.Examplesincludeaccountingfirmslawfirms,designfirms,andtax consultingfirms,medical practices,amongothers.Specializedgeneral partnershipsarerequiredtoincludetheterm"specialized general partnership"intheirbusinessnamestodistinguishthemfromgeneralpartnerships
Specialized General Partnership What is a specialized general partnership? ◦ A specialized general partnership is a type of general partnership which is a professional entity that provides paid services to its clients with specialized knowledge and skills. ◦ Examples include accounting firms, law firms, design firms, and tax consulting firms, medical practices, among others. ◦ Specialized general partnerships are required to include the term "specialized general partnership" in their business names to distinguish them from general partnerships