Research On The Organization Of Limited Partnership System Of The PRC

Limited Partnership is one of the great creations in the human history which originated in the middle century of Europe while the canon law playing a dominate role. It is prohibited to grant loan for the purpose of making profit according to the canon law, but the smart merchants created the precursor of Limited Partnership, i.e. the Commenda Contract. Why does the Limited Partnership has so strong vitality, and why has it been used widely in the world after its thousand years of development and became the preferred system for the venture capital organizational pattern in some developed countries? The author adopted the research means of empirical and comparative analysis in this thesis, focusing on the textual research of the development of Limited Partnership and its application and improvement in the two major legal systems, discovering the deficiency of out country's relevant legislation on the basis of the history and current situation of our country's Limited Partnership establishment and putting forward to relevant suggestion in respect of legislation.This thesis consists of five chapters.The first chapter consists of two sections. The textual research of the information and development of Limited Partnership was conducted in the first section. And the author researched the definition and legal characteristics of Limited Partnership and discovered the deficiency of the existing definition of Limited Partnership and then putted forward to his own comments, thinking that the Limited Partnership can be completely defined as: Limited Liability refers to the commercial organization legally registered upon approval and established by over two persons on the basis of contract, and at least one of those two or more persons undertakes unlimited (joint and several) liability and at least one person undertakes limited liability for the debts of the partnership. Such definition reflects the three major legal characteristics of limited partnership, i.e. duality of subject, duality of unity of capital joint and partner joint, duality of partner's liabilities or "Confused Liabilities". In the first section of the second chapter, the author researched the history and development of Limited Liabilities in common law system in details. The search on the Limited Partnership in the laws of America accounted for an important part of this section. Besides the traditional Limited Partnership, two new kinds of partnership appeared in the United Sates with the development of economy, i.e. Limited Liability Partnership and Limited Liability Limited Partnership. In the second section, the author researched the Limited Liability in civil law system. The author did not only researched the legislation of rules and local regulations concerning Limited Partnership and the practice of Limited Partnership as an enterprise's organizational pattern in the PRC, but also researched the breakthrough in the amendment of Partnership Enterprise Law.In the third chapter, the comparative analysis method was used to research the comparative advantages of Limited Partnership. This chapter consists of three sections. The author compared Limited Partnership to General Partnership in the first section and concluded that Limited Partnership has stronger financing ability and is more stable. In the second section, the author made a comparison between Limited Partnership and Corporate Enterprise and concluded that the comparative advantages of Limited Partnership include: easy establishment; investors undertake less liability than shareholders; its business management benefits the establishment of motivation and restraint mechanism; lower management cost; efficient decrease of agent's risk; decrease of controller's risk; better maintaining of commercial secret; making up the deficiency of limited liability in protecting the creditors. In the third Section, the author compared Limited Partnership to Silent Partnership and concluded that investors in Limited Partnership is more active, Limited Partnership is more stable and the restriction imposed by Limited Partnership on the participation of partnership business by partners is more relived.The fourth chapter consists of two sections, focusing on the feasibility of establishment of Limited Partnership. In the first section, the author concluded that the absence of Limited Partnership system caused several problems including the absence of commercial bodies, the contravention of interested parties' implication of will and deficiency in the protection of transaction security. In the second chapter, the author discussed the positive effects of establishing Limited Partnership in six aspects.On the basis of above discussion, the author put forward to nine legislative suggestions in the fifth chapter. In the light of two kinds of legislation method concerning Limited Partnership in the world, i.e. consolidated legislation and separated legislation, the author stated six legislative reasons why we should choose separated legislation in the first section. In the second section, the author refuted the opinion thinking that the subject of Limited Partnership is not Limited Partnership itself but the natural person. And the author concludes that the legislation considering the Limited Liability as independent entity can not meet the requirement of practice and that we should grant Limited Partnership independent corporate capacity from the strategic perspective of legislation and with reference to the legislation of other countries. In the third section, the author proposed to set out different conditions of establishment in legislation. And the author proposed in the fourth section that we should adopt real name system applicable to the investors through registration and publication so as to eliminate dormant invest in Limited Partnership for the purpose of maintaining social stability and preventing the spreading of corruption. Concerning the type and number of partners, the author holds the opinion in the fifth section that we should adopt an open legislative mind to make it possible for the natural person, legal person and other organizations including partnership become the partner of Limited Partnership and shall not impose a upper limit in the number of partners of Limited Partnership. In the sixth section, the author initially suggested to establish internal standing organization in the Limited Partnership for the purpose of ensuring the investment security of partners of Limited Partnership. In the seventh section, the author proposed to absorb advanced legislative experience of developed countries, allowing contribution by installments and establishing "No-fault divorce" system. In the eighth section, the author pointed out the blank of this legislation that the amended Partnership Enterprise Law does not cover the organization transformation of Limited Partnership and putted forward to his own primary suggestion. In the ninth section, the author suggested the legislative authorities of our country to amend relevant laws for the purpose of preparing for the implementation of Limited Partnership.