Limited Liability And Protection For Creditors In The Limited Liability Partnership

The PRC Partnership Enterprise Law (revised) has gone into effect on June 1, 2007. This new law stipulates a number of new provisions in respect of partnership, such as limited liability partnership,kinds of limited liability partnership and allowing legal person to be a partner. Thereinto, the new law just design a basic framework on"special general partnership". It is pleasant to introduce the new system. However, something needs to be deeply worried about: Will the simple legislation truly meet the needs of the market? How can the general value of the partnership system be ensured through the establishment of the supporting systems? Because the limited liability partnership intensifies the potential conflict between the partnership members and creditors, how can the interests of creditors and investors be balanced?The Limited liability partnership system eliminates the joint and unlimited liability for the partners, but there are no similar principles for protection of creditors such as"capital maintenance"in Corporation Law. Therefore , protection of the creditors while eliminating the joint and unlimited liability for the partners,and balance between the public interests and professional interests and controlling conflicts of interest become the most concern of this new law, which is also the focus of controversy in the process of legislation. Based on the above considerations, the author starts with the protection of creditors for this paper, discusses improvement of the current limited liability partnership system,so as to realize the possibility of the balance between the limited liability of partners and the creditors.This paper studies on the following clues and logic: the conflicts and development between the protection of creditors in the development of the limited liability partnership and improvement of the operation of the limited liability partnership; The operation system of limited liability in the limited liability partnership; General theory on protection of creditors of limited liability partnership; and balance between the interests of the creditors and limited liability. The full text is divided into three chapters with the preamble and conclusion. The preamble introduces the necessity of protection mechanism for creditors. The first chapter starts with the cause value of limited liability partnership,puts forward the practical demands of the limited liability rules on the basis of comparison of limited liability partnership with other organization pattern , introduces the characteristic, legal status and targets, and then analyzes the nature of limited liability partnership and its effects exertion mechanism. The second chapter explains the limited liability rules by analysis of the assumption of partners of unlimited liability or limited liability under the limited liability partnership and the protection mechanism for the interests of the creditors. The third chapter aims to analyze the flaw of the limited liability partnership under the current laws in China , discusses how to coordinate the interests of creditors with the limited liability of the partners in the limited liability partnership , and puts forward some reasonable suggestions on how to establish the mechanism for protection of the interests of creditors, combining the characteristics and the existing problems of limited liability partnership system in China.