《presentation,eng_企业管理_经管营销_专业资料》由会员分享，可在线阅读，更多相关《presentation,eng_企业管理_经管营销_专业资料（9页珍藏版）》请在金锄头文库上搜索。
1、THE CHARACTERRISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMS1 / 9THE CHARACTERISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMSTHE CHARACTERRISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMS2 / 9Sole proprietorshipDefinitionA sole proprietorship, also known as the sole trader or simply a proprietorship, is a
2、 type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business. The owner is in direct control of all elements and is legally accountable for the finances of such business and this may include debts, loans, loss etc.
3、The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietors. It is a sole proprietorship in contrast with partnerships
4、 (which have at least 2 owners).The characteristics of sole proprietorship1. The business is completely owned by one natural person(a) All the investment is made by one natural person(b) The owner possess both profit and loss2. The liability is unlimitedThe owner is responsible for all the liabiliti
5、es personally. Since the owners equities and the business are dependent, the owner is supposed to pay the debt even with hes own money which is out of the business.3. The scale of a sole proprietorship is usually smallAdvantage of sole proprietorship1. Easy to found, dismiss and transfer2. Flexible
6、to manage 3. Requires less investment4. Lower tax rateDisadvantage of sole proprietorship1. The owner must undertake the big risk of unlimited liability2. Harder to enlarge the scale3. Harder to get investment from out of the businessTHE CHARACTERRISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMS3 / 9Pa
7、rtnership DefinitionA partnership is a type of unincorporated business organization in which multiple(two or more) individuals, called general partners, manage the business and are equally liable for its debts.Types of partnershipGeneral partnershipsDefinitionAn arrangement by which partners conduct
8、ing a business jointly have unlimited liability, which means their personal assets are liable to the partnerships obligations. It is a partnership in which partners share equally in both responsibility and liability.Characteristics1. Each individual partner can be sued for the full amount of any bus
9、iness debt. 2. Each partner has agency authority for the partnership - that is, each partner can bind the whole business to a contract or business deal.3. All partners are personally liable for all business debts, including court judgments 4. Limited life and unlimited liabilityLimited liability par
10、tnership (LLP)DefinitionA limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. In an LLP, one partner is not responsible or liable for another partners misconduct or negligence.Attention:In China, the LLP is know
11、n as a Special general partnership (特殊普通合伙). The organizational form is restricted to knowledge-based professions and technical service industries. The structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners.THE CHARACTER
12、RISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMS4 / 9Characteristics1. Not responsible or liable for another partners misconduct or negligence2. The partners have the right to manage the business directly.3. Provides all of its owners with limited personal liability4. Limited life and limited liabilit
13、yLimited partnershipDefinitionA limited partnership is formed by a combination of general partners and limited partners where the limited partners bear the liabilities for the partnerships debts to the extent of their capital contributions. It is a partnership in which only one partner is required t
14、o be a general partner.Characteristics1. Limited partners do not play an active role in the business.2. Limited partners are not personally liable.3. Limited partners face slightly different tax rules. 4. Only one partner is required to be a general partner.5. Limited life and limited liabilityCompa
15、ny DefinitionA company is an association or collection of individuals, whether natural persons, legal persons, or a mixture of both. Company members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve speci
16、fic, declared goals.THE CHARACTERRISTICS OF CHINESE BUSINESS ENTITY LEGAL FORMS5 / 9Types of Corporate EnterpriseLimited Liability CompanyDefinitionLimited liability Company, funded by the 50 following shareholders established minimum amount of registered capital 30,000 Yuan. Shareholders of a limited liability company, with its limit of the capital subscribed responsible for the company. Only a natural person or a corporate shareholder of a limited liability com
