Research On The Legal System Of The Bankruptcy Of Partnership

Partnership and corporate enterprise have become the principal part on the market,which have played a very important role. In china, since the establishment of socialist marketeconomy, the reform of enterprise’s ownership and the change of concept of legislation onenterprise, property relations, responsibility and model of organization have become thecriteria on the identification of enterprises. Partnership, as the main body of the civil legalrelationship, has played an increasingly important role in the process of socioeconomicdevelopment in our country.On June1st, the revised version of “Law on Partnership of the People’s Republic ofChina”, which will be called thereafter for short, and the “Bankruptcy Law on Enterprise ofthe People’s Republic of China” which will be called Bankruptcy Law on Enterprise, havejointly come into force. Despite great breakthroughs and innovation in the above two laws,compared with the past, many issues still need further more specific stipulations, of which,the issue on the bankruptcy of partnership is pronounced.It is still a disputed issue whether or not the partnership is endowed with thequalification of declaration of bankruptcy. It is also yet recognized by the law. The resultantconsequence is that in the process of market competition, when the partnership lost the abilityof solvency for liabilities, bankruptcy liquidation cannot be conducted, which in turn is notbeneficial to the equal protection for the oblige. In many cases, it is also unfavorable to theinterest protection of partners.The revised version of the “Law on Partnership” and the “Bankruptcy Law onEnterprise” put a stop to such a issue, but there are only several articles in the laws whichcarry relevant stipulations, such as the92th article in the “Law on Partnership” and the134tharticle in the “Bankruptcy Law on Enterprise”. Moreover, it is only clearly stated in the lawthat the bankruptcy liquidation can be conducted on the partnership and not stated thatwhether or not bankruptcy reformulation and bankruptcy reconciliation can be implementedon the partnership like those on the enterprise legal person. Apart from this, bankruptcy liquidation of partnership is conducted by referring to the procedures of bankruptcy for theenterprise legal person.But, due to the obvious differences lying in the property constitution, model oforganization and responsibility scope between the partnership and the enterprise legal person,coupled with the fact that the partnership has not the same complete civil conduct capabilityas the enterprise legal person, ordinary partners still need assume unlimited jointresponsibility when bankruptcy is declared for the partnership. In addition, the “Law onPartnership” has stipulated limited partnership system. Expression as “referred application”seems to be very fragile in the face of special procedure issues of partnership bankruptcy.The above two laws concerning the legislation of the system on bankruptcy ofpartnership only touch on bankruptcy liquidation of partnership, without stipulations onwhether it can refer to bankruptcy reconciliation and reformulation system. However thesetwo laws, especially bankruptcy reconciliation system have much presence in the legislationon bankruptcy of foreign countries. Therefore, discussion on the necessity of establishment ofa system on bankruptcy reconciliation and reformulation of partnership constitutes the maincomponent part of this paper. The author holds that there is an urgent necessity ofestablishment of bankruptcy reconciliation and reformulation of partnership.Considering the small scale of the majority of partnerships and the complex proceduresof bankruptcy, redundant procedures may become hurdles of realization of legislation value.Therefore, establishing simplified procedures of partnership’s bankruptcy is also theimportant link in improving the bankruptcy system of partnership in our country.