Research On China’s Limited Partnership Affairs Execution System

With the continuous development of China’s social productive forces and the constant improvement of socialist market economy system, partnership enterprises have become more and more universal. Following the issuing of the first Partnership Enterprise Law in1997, Standing Committee of NPC revised and passed the Partnership Business Law of the People’s Republic of China on August27of2006as an adaption to the requirements for domestic economic development of China. The revised parts include:first, the scope of partners; second, income tax to be paid by partnership enterprises; third, the bankruptcy issue of limited partnership enterprises and special common partnership; four, issues on partnership enterprises set up by foreign enterprises or individuals in China. Since China started late on partnership enterprise system and is in shortage of experience on this area, this paper has studied the deficiencies of China’s partnership enterprise system from the perspective of limited partnership transaction execution system. Through combining with cases, this paper has analyzed the challenge (limited partnership transaction execution system) faced in the process of implementing the Partnership Enterprise Law of2006and come up with corresponding legislative suggestions.Except for the introduction and conclusion parts, this paper is consisting of four parts.To study problems existing in the China’s limited partnership transaction execution system, it is necessary to have a correct analysis on the legal relations of limited partnership. Therefore, in the first part, which is focusing on the legal relations of limited partnership, the internal and external legal relations of a partnership enterprise happened in the process of executing limited partnership transactions are analyzed. The internal legal relations of a partnership enterprise include the relations between general partners and the relations between general partners and limited partners. On the other hand, the external legal relations include relations between the partners and creditors and legal relations between the partners and third persons. In the second part, which is focusing on the legislation situation of limited partnership transaction execution system in foreign countries, provisions on the execution of partnership transactions in the United States, France, German and Japan are introduced and a conclusion is made through comparison. In the third part, which is on the dilemma of China’s limited partnership transaction execution system, the plight of China for executing partnership transactions is analyzed, In specific, it includes:the issue of obscure definition of "executive partnership transactions"; the issue of too-narrow scope of "not to be viewed as behaviors of an executive partnership transaction behavior"; the issue of poor internal supervision of partnership enterprises; the issue of asymmetric information, and; the issue of an absence of fiduciary duty. Finally, the fourth part is on methods for solving problems existing in China’s limited partnership transaction execution system, including:a clear definition of "partnership transaction"; extensive interpretation of "behaviors not to be viewed as executive partnership transaction"; the perfection of the information disclosure system, etc.