China Guangzhou Partnership Enterprise Establishment Service
Hotline: 86-755-82148419 Email: susiehu@citilinkia.com
Introduction of Partnership Enterprise
Establishing a Partnership Enterprise by Foreign Enterprises or Individuals is a way to choose for investment in Guangzhou.
Partnership enterprise refers to general partnerships and limited partnerships which may be established within China by individuals, legal persons and other organizations. Meanwhile, a state-owned company, state-funded company, listed company, public welfare-oriented public institution or social organization may not become a general partner of a limited partnership.
There's no required minimum registered capital for a Partnership Enterprise (PE) in China.
The Foreign Invested Partnership Enterprise (PE) is an unlimited liability business entity without minimum requirements on registered capital formed by several partners, at least one of whose partners is a foreign investor.
Foreign-invested Partnership Enterprise (FIPE) is an unlimited liability business entity. Both foreign individuals and legal entities can be partners of a FIPE.
There are three different types of the Foreign Invested Partnership Enterprise (FIPE)
General partnership Enterprise (GPE)
A general partnership enterprise may be formed by general partners who bear unlimited joint and several liability for the debts of the partnership. The general partners share unlimited liabilities for the debt of the partnership.
Limited partnership enterprise (LPE)
A limited partnership enterprise is formed by a combination of general partners and limited partners where the limited partners bear the liabilities for the partnership's debts to the extent of their capital contributions.
Special General Partnership enterprise (SGP)
A special general partnership enterprise resembles a general partnership except that it must be a professional service institution offering services requiring professional knowledge and special skills. The structure shields co-partners from liabilities due to the willful misconduct or gross negligence of one partner or a group of partners. It is very similar to limited liability partnership in Europe and America.
Advantages of establishing a Partnership Enterprise：
1. No requirements on minimum registered capital;
2. Less procedures comparing with Wholly Foreign Owned Enterprise or Joint Venture
3. No corporate income tax for partnership enterprise;
4. It permits men possessing different kinds of abilities to unite, thereby increasing efficiency. Second.
5. It makes possible the employment of larger capital, which, as we shall see later, contributes to increased production.
6. Foreign Enterprise or Individual is allowed to establish a Partnership Enterprise with Chinese individual (While Chinese individual is not allowed to have Joint Venture with foreign investor)
Disadvantages of establishing a Partnership Enterprise
1. Compared with the single enterpriser the partnership is at a disadvantage in the matter of business policy and authority. Unlike a single enterpriser, the member of a partnership must share more or less authority with others. Consequently, as often happens, the partners work at cross purposes, one advocating one business policy, a second advocating a different policy, while a third partner may disagree with both policies. Oftentimes, under such circumstances, it is found desirable to dissolve the partnership.
2. Unlimited liability; A partnership must pay all its debts with property contributed to the partnership by the partners. If the partnership is a general partnership then the partners bear joint and several liabilities;
3. As for trading business of a PE, since PE is not a general tax payer, PE can't get VAT status, and can't apply for VAT rebate accordingly.
4.Property rights of partnership enterprise is difficult to be transferring to a third party as according to the Partnership Enterprise Law: the property rights of partnership transfer MUST be agreed by all partners in a PE;
For further inquiries about investment in China,please contact us ATAHK for the details, ATAHK can provide a series of follow-up services to customers, such as bank account opening, CPA report, bookkeeping, auditing, monthly tax return and tax layout, annual return services, financial planning and China market study, Other services include domain name registration, web page design, website promotion, China trademark registration, Work Permit, Residence Permit, etc.
Contact Us
For further inquiries about investment in China, please do not hesitate to contact us at anytime anywhere by simply calling China hotline at 86-755-82148419, or emailing to susiehu@citilinkia.com.You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.