Research On The Rights Protection Of Limited Partners In A Limited Partnership Private Equity Fund

Limited partnership (LP), a main form of Private Equity Funds (PEF), has been developing for decades in the Western developed countries while it only steps on stage in China. China's increasingly open market provides a favorable environment for the PEF in LP to pick up the momentum, however, that domestic laws fail to efficiently protect limited partners' rights holds back this wave. Limited partners, as main capital provider, are of critical importance to a healthy development of PEF. In US, legal framework to protect PEF in LP can provide meaningful lessons to us since it becomes sophisticated in regulating, as well as making adjustment to meet market demands after practicing for more than a hundred years.This paper dedicates to suggest on how to improve China's deficient right-protection mechanism through analysis of a number of rights enjoyed by limited partners under the provisions of relevant laws in U.S., comparing protection of limited partners' rights in US and that in China. Specifically, this paper is divided into four chapters.Chapter ? is on the importance of protecting limited partnerships in PEF in LP. In this part, the author firstly details the structure of PEF in LP and highlights the contribution of limited partners, then analyses the desirability to protect limited partners' rights and a relationship between right-protection mechanism and development of PEF.Chapter ? mainly maps out the deficiencies in protecting limited partners under current legal framework in China. This section introduces the existing laws and regulations related to regulating PEF in LP, with comments on the imperfection of rights-protection mechanism. To be specific, four deficiencies are discussed. First, there are no qualification criteria for the general partner (GP).Second, the content of limited partners'rights of management is limited; Third, the right for limited partners to make surveillance on GP is difficult to achieve. Finally, the litigant right is hard to be observed.Chapter ? sheds lights on how LP's rights protected in US. This Chapter not only presents how limited partners'right have been protected under US law, along with the policy considerations behind those rules, but also demonstrates their role in promoting PEF in LP.Chapter ? is based on comparison between right-protection mechanism on limited partners in US and China. It firstly stresses the proper principles underpinning rights-protection mechanism to escort limited partners, then makes suggestions on how to get over those four deficiencies depicted in Chapter II in seriatim.