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Law of the People's Republic of China on Partnerships 1

  • Type : Regulation
  • Release Date : 2010-10-13

Order of the People's Republic of China No.55

  The Law of the People's Republic of China on Partnerships, amended and adopted at the 23rd Meeting of the Standing Committee of the Tenth National People's Congress of the People's Republic of China on August 27, 2006, is hereby promulgated and shall go into effect as of June 1, 2007.

  Hu Jintao
  President of the People's Republic of China

  August 27, 2006

Law of the People's Republic of China on Partnerships

  (Adopted at the 24th Meeting of the Standing Committee of the Eighth National People's Congress on February 23, 1997 and amended at the 23rd Meeting of the Standing Committee of the Tenth National People's Congress on August 27, 2006)

  Contents

  Chapter I General Provisions

  Chapter II General Partnerships

  Section 1 Establishment of a Partnership

  Section 2 Property of a Partnership

  Section 3 Management of Partnership Affairs

  Section 4 Relationship of a Partnership to a Third Party

  Section 5 Entering into and Retiring from a Partnership

  Section 6 Specialized General Partnerships

  Chapter III Limited Liability Partnerships

  Chapter IV Dissolution and Liquidation of a Partnership

  Chapter V Legal Liability

  Chapter VI Supplementary Provisions

  Chapter I

  General Provisions

  Article 1 This Law is enacted in order to regulate the behavior of partnerships, to protect the lawful rights and interests of partnerships and the partners and creditors therein, to maintain social and economic order, and to promote the development of the socialist market economy.

  Article 2 For the purposes of this Law, “partnerships” refer to both general partnerships and limited liability partnerships, both of which are established according to this Law by natural persons, legal persons or other organizations within the territory of China.

  A general partnership is composed of general partners who bear unlimited joint and several liability for the debts of the partnership. Where there are special provisions in this Law on the forms of liability borne by general partners, those provisions shall prevail.

  A limited liability partnership is composed of general partners and limited partners, with the former bearing unlimited joint and several liability for the debts of the partnership and the latter bearing liability for such debts respectively within the limits of the capital contributions subscribed for.

  Article 3 A wholly State-owned company, a State-owned enterprise, a listed company, or a public welfare undertaking or public organization shall not become a general partner.

  Article 4 A partnership agreement shall be lawfully concluded, in written form, on the basis of agreement reached by all the partners through consultation.

  Article 5 The principles of free will, equality, fairness and good faith shall be observed in concluding a partnership agreement and establishing a partnership.

  Article 6 The partners of a partnership shall, according to the tax regulations of the State, respectively pay taxes on the partnership's incomes derived from production, business operation and other sources.

  Article 7 A partnership and its partners shall abide by laws and administrative regulations, observe social and business ethics and shoulder social responsibility.

  Article 8 The lawful property and rights and interests of a partnership and the partners therein shall be protected by law.

  Article 9 For the application for establishment of a partnership, such documents as a written application for registration, a partnership agreement and the identity papers of the partners shall be submitted to the enterprise registration authority.

  Where within the business scope of a partnership there is any item for which approval is required prior to registration of the partnership, as provided for by laws or administrative regulations, such approval shall be obtained according to law and the approval document shall be submitted when applying for registration.

  Article 10 Where the application materials submitted for registration by an applicant are complete and conform to the statutory form, the enterprise registration authority shall, if it can, grant the registration on the spot and issue a business license.

  In the absence of what is prescribed in the preceding paragraph, the enterprise registration authority shall, within 20 days from the date it receives an application for registration, decide whether or not to grant registration. If it decides to grant registration, it shall issue a business license; otherwise, it shall give a written reply and state the reasons.

  Article 11 The date of issuance of the business license to a partnership shall be the date of establishment of the partnership.

  Before a partnership obtains the business license, no partner therein shall engage in any partnership activities in the name of the partnership.

  Article 12 Where a partnership intends to set up a branch, it shall apply for registration to the enterprise registration authority at the place where the branch is to be located, in order to obtain a business license.

  Article 13 Where a registered item of a partnership needs to be altered, the managing partner shall, within 15 days from the date a decision on alteration is made or the cause for alteration arises, apply to the enterprise registration authority for registration of alteration.

  Chapter II

  General Partnerships

  Section 1 Establishment of a Partnership

  Article 14 For establishment of a partnership, the following conditions shall be met:

  (1) having two or more partners. If a partner is a natural person, he shall have full capacity for civil conduct;

  (2) having a written partnership agreement;

  (3) having capital subscribed for or actually contributed by partners;

  (4) having a name for the partnership as well as production and business premises; and

  (5) other conditions provided for by laws and administrative regulations.

  Article 15 The words “general partnership” shall be clearly indicated in the name of a partnership.

  Article 16 A partner may make capital contributions in cash or in kind, or in the form of intellectual property rights, land-use right or other property rights, or labor services.

  Where a partner makes capital contributions in kind or in the form of intellectual property rights, land-use right or other property rights, the value of which needs to be assessed, the value may be determined by all the partners through consultation, or be assessed by a statutory assessment institution authorized by all the partners.

  Where a partner makes capital contributions in the form of labor services, the method of assessment shall be determined by all the partners through consultation and be clearly stated in the partnership agreement.

  Article 17 A partner shall fulfill the obligation of capital contributions in compliance with the form, amount and time limit for contribution, as are specified in the partnership agreement.

  Where capital contributions are made with non-monetary property and, according to the provisions of laws or administrative regulations, formalities for transfer of the said property need to be completed, such formalities shall be completed according to law.

  Article 18 In a partnership agreement, the following items shall be stated clearly:

  (1) the name of the partnership and the location of its principal premises for business;

  (2) the objectives of partnership and the scope of business of the partnership;

  (3) the names or titles, and domiciles of the partners;

  (4) the form, amount and time limit for capital contributions to be made by the partners;

  (5) the way of distributing profits and sharing losses;

  (6) the management of partnership affairs;

  (7) the entering into and retiring from the partnership;

  (8) the method of dispute settlement;

  (9) the dissolution and liquidation of the partnership; and

  (10) the liability for breech of agreement.

  Article 19 A partnership agreement shall become effective after all the partners have signed or affixed their seals to it. A partner shall enjoy rights and undertake liabilities in accordance with the partnership agreement.

  Amendment and supplement to the partnership agreement shall be subject to agreement reached by all the partners, unless otherwise stipulated in the partnership agreement.

  For a matter which is not included in the partnership agreement or which is not clearly stated in the agreement, it shall be decided on by the partners through consultation; where consultation fails, it shall be handled according to the provisions of this Law and of other laws or administrative regulations.
(To be continued)

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