Study On The Legal Problems Of Establishing The Limited Partnership Fund Of Private Equity

Limited Partnership is one kind of partnerships, which originates in the MiddleAges in Italy and now holds an important position in the market for its particularadvantages. In2006, legal status of the limited partnership was clarified in PartnershipEnterprise Law. Followed by it, many private equity enterprises of limited partnershipsprung up and obviously triggered great development of private equity investmentindustry in China. Only in2008, more than thirty limited partnership investmentcenters were established and all engaged in private equity investment industry. Exceptother triggers, limited partnership has a great contribution to this fast development.The paper studies the characteristics of private equity investment from a legalperspective. Advantages of applying limited partnership to private equity are outlinedthrough analyzing the source development features of limited partnership. By learningthe history and legislative status of private equity fund of limited partnership inAmerica, it reaches to the conclusion that limited partnership has played a big role inpromoting private equity investment and what are the implications to China. At last,solutions and suggestions are provided in accordance to the study of problems thatoccurred during the development of limited partnership in China.In addition to preface, the paper consists of three parts.In Chapter One, it states the definition of private equity fund, and elaborates itscharacteristics and great contribution to national economy development. Obligatingprinciples of forming an organization by private equity fund is summarized.Advantages of applying it to private equity fund are outlined with the origin and characteristics of limited partnership.In Chapter Two, it studies the development process of American private equityfund of limited partnership and particularly emphasizes on its domestic legislation oflimited partnership, as America has the most developed private equity fund industryand80%of which are formed in limited partnership. Taking consideration of itspresent status and development reasons, it recognizes the indelible contribution thatlimited partnership has to the development of private equity fund and the significantreference to China’s development.In Chapter Three, by reviewing the development of limited partnership in Chinaand comparing to the systems of company ownership and trust, it highlights problemsof China’s limited partnership, such as imperfect legal system and administrationregulations, single withdrawal channel, and absence of certificated general partnersand highly qualified limited partners.In Chapter Four, it is delegated to provide solutions and suggestion to theproblems that are encountered by developing limited partnership in our country. Theyare: improving on Partnership Enterprise Law and the legal system of tax regulations,establishing perfect withdrawal channel, improving the derivative litigation system forlimited partners, and improving on legislative regulations of qualified investors andmanagement.