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Partnership Enterprises as Sino-Foreign Alliances

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China’s Foreign-Invested Limited Partnership Enterprise

Part of the book series: China-EU Law Series ((CELS,volume 7))

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Abstract

The Foreign-Invested Limited Partnership Enterprise (FILPE) is embedded in the historical development and legal framework of both domestic and foreign-invested partnership enterprises in China. A detailed analysis of the FILPE’s governing laws and regulations, its establishment process and investment restrictions is undertaken. Fundamental elements of a FILPE, including the partnership agreement, its taxation and the treatment in Chinese courts are likewise analysed. An overview is given of the different types of domestic-invested and foreign-invested partnership enterprises which exist in China.

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Notes

  1. 1.

    Mao (茆荣华) and Zhao (赵超) (2007), p. 58; Jaeger (1961–1962), p. 138.

  2. 2.

    Hansmann et al. (2005), p. 6; Kaser and Knütel (2014), pp. 267–270.

  3. 3.

    For a detailed account of the history of partnership enterprise law in ancient China, see Lin (2013b), pp. 219, 221–237; Yuantao et al. (1989), pp. 43–46.

  4. 4.

    Lin (2013b), p. 219.

  5. 5.

    Yuantao et al. (1989), p. 43.

  6. 6.

    Lin (2013b), p. 223.

  7. 7.

    Ibid, p. 223.

  8. 8.

    Ibid, p. 225.

  9. 9.

    Ibid, p. 226.

  10. 10.

    Ibid, p. 227.

  11. 11.

    Ibid, p. 230.

  12. 12.

    Ibid, p. 230.

  13. 13.

    Yuantao et al. (1989), pp. 43–44.

  14. 14.

    Lin (2013b), pp. 230–231.

  15. 15.

    Yuantao et al. (1989), pp. 43–44.

  16. 16.

    Ibid, pp. 43–44.

  17. 17.

    Lin (2013b), p. 236.

  18. 18.

    Ibid, p. 238.

  19. 19.

    Kirby (1995), pp. 43–44.

  20. 20.

    Lin (2013b), pp. 238–239; Kirby (1995), p. 44.

  21. 21.

    Kirby (1995), p. 45.

  22. 22.

    Lin (2013b), p. 248.

  23. 23.

    Also the first Company Law in China, see Sect. 3.1.1.

  24. 24.

    Jiang (江平) and Li (李固光) (2005), pp. 24–25; Kirby (1995), p. 48.

  25. 25.

    Ye (2002), pp. 1–2.

  26. 26.

    Ibid, p. 2.

  27. 27.

    Jiang (江平) and Li (李固光) (2005), p. 25.

  28. 28.

    Ibid, p. 25; Ye (2002), p. 2.

  29. 29.

    Jiang (江平) and Li (李固光) (2005), p. 25.

  30. 30.

    Ibid, p. 25; Lin (2013b), p. 239.

  31. 31.

    Kirby (1995), p. 49.

  32. 32.

    Ibid, p. 51.

  33. 33.

    Ye (2002), p. 3; Lin (2013b), p. 239.

  34. 34.

    Ye (2002), pp. 2–3.

  35. 35.

    These provisions regarding partnerships are still valid in Taiwan today (Ye 2002, p. 3).

  36. 36.

    Teesdale (1932), p. 248; regarding the 1946 Company Law, see Sect. 3.1.1.

  37. 37.

    Ye (2002), p. 3; Teesdale (1932), p. 249.

  38. 38.

    Lin (2013b), pp. 219–220.

  39. 39.

    Yuantao et al. (1989), p. 46.

  40. 40.

    Lin (2013b), pp. 220–221.

  41. 41.

    Ibid, p. 220.

  42. 42.

    Ibid, p. 220 fn. 10, 240.

  43. 43.

    Ye (2002), p. 3.

  44. 44.

    Lin (2013b), p. 220 fn. 10; Ye (2002), p. 3.

  45. 45.

    Kirby (1995), p. 56.

  46. 46.

    Interim Provisions on Private Enterprises (私营企业暂行条例), promulgated by the Administrative Council on 30 December 1950 and repealed on 25 July 1986.

  47. 47.

    Art. 3 Interim Provisions on Private Enterprises.

  48. 48.

    Measures for Implementing the Interim Regulations on Private Enterprises (私营企业暂行条例施行办法), promulgated by the Finance and Economic Commission of the Administrative Council on 30 March 1951 and repealed on 25 July 1986.

  49. 49.

    Arts. 31–39 Implementing Measures for Interim Regulations on Private Enterprises.

  50. 50.

    Interim Provisions on the Merger of State-Owned and Private-Owned Industrial Enterprises (公私合营工业企业暂行条例), promulgated by the Administrative Council on 5 September 1954 and and repealed on 25 July 1986.

  51. 51.

    Chen (2014a), p. 21; Ye (2002), p. 4.

  52. 52.

    Yuantao et al. (1989), p. 47.

  53. 53.

    Ye (2002), p. 4; Kirby (1995), p. 56.

  54. 54.

    Lin (2013b), p. 220 fn. 10; Ye (2002), p. 5.

  55. 55.

    Chen (2014a), p. 21.

  56. 56.

    Chen (2016), p. 650; Ye (2002), p. 5.

  57. 57.

    Ye (2002), p. 5.

  58. 58.

    Ibid, p. 5.

  59. 59.

    Ibid, p. 5; Yuantao et al. (1989), p. 47.

  60. 60.

    Yuantao et al. (1989), p. 47.

  61. 61.

    Ibid, pp. 47–48.

  62. 62.

    Ibid, p. 48.

  63. 63.

    See Sect. 3.1.3 fn. 40.

  64. 64.

    The Individual Industrial and Commercial Household (个体工商户) and Rural Contracting Household (农村承包经营户), regulated in Articles 26–29 GPCL/ 54–56 GRCL, also resemble characteristics of a partnership, when run by an entire family. However, Chinese scholars point out that these two households are regulated under the section for Citizen (Natural Person), and categorise them as ‘special subjects of civil law’ (Chen (2016), pp. 633–634, 654; Epstein and Shen (2009), p. I-6.1.34). Even scholars who consider them as partnerships under certain circumstances, recognise that they only meet the partnership criteria in very few cases (Yuantao et al. 1989, p. 52). Therefore, both households are not further analysed in this book.

  65. 65.

    Arts. 30–35 GPCL.

  66. 66.

    Arts. 51–53 GPCL.

  67. 67.

    Ye (2002), p. 6.

  68. 68.

    The GPCL actually use the term citizen (公民) instead of natural person. However, since the usage of the term citizen has primarily historical and ideological reasons (Chen 2016, pp. 471–475), and the new General Rules of Civil Law (see Sect. 4.2.1.1 fn. 600) replace the term citizen with the term natural person, the term natural person will be utilised in this book.

  69. 69.

    Art. 30 GPCL. For a more detailed analysis, see Sect. 4.2.1.2.

  70. 70.

    Art. 52 GPCL. For a more detailed analysis, see Sect. 4.2.1.3.

  71. 71.

    Epstein and Shen (2009), p. I-6.1.31; Yuantao et al. (1989), p. 54; Zheng (1986), p. 681.

  72. 72.

    Howson (2015), p. 394.

  73. 73.

    Art. 51 GPCL.

  74. 74.

    Art. 53 GPCL.

  75. 75.

    Art. 52 GPCL; Yuantao et al. (1989), p. 57.

  76. 76.

    Yuantao et al. (1989), p. 63.

  77. 77.

    Clarke (2005–2006), p. 64.

  78. 78.

    See Sect. 3.1.3 fn. 38.

  79. 79.

    Art. 11 Para. 2 Constitution in the version of 1988.

  80. 80.

    Chen (2016), pp. 629–630.

  81. 81.

    Hershkovitz (1985), p. 427.

  82. 82.

    Chen (2016), p. 630.

  83. 83.

    See Sect. 3.1.3 fn. 41.

  84. 84.

    Implementing Measures for PRC Interim Regulations on Private Enterprises (中华人民共和国私营企业暂行条例施行办法), promulgated by the State Administration of Industry and Commerce on 16 January 1989; amended on 17 December 1996 and amended on 3 December 1998.

  85. 85.

    Art. 2 Interim Regulations on Private Enterprises.

  86. 86.

    For more details, see Chen (2016), pp. 635–637; Heuser (2002), pp. 384–386.

  87. 87.

    Art. 6 Interim Regulations on Private Enterprises.

  88. 88.

    Art. 8 Interim Regulations on Private Enterprises.

  89. 89.

    Chen (2016), p. 636; Ye (2002), p. 6.

  90. 90.

    Ibid, p. 6.

  91. 91.

    Heuser (2002), pp. 388–389.

  92. 92.

    The further amendment of the Constitution in 1999 no longer considered the individual and private economies as a complement to the socialist public economy, but rather defined it as ‘an important component of the country’s socialist market economy’. (Art. 11 1999 Constitution). The latest revision of the Constitution of 2004 recognises the ongoing development of the private sector in different new business forms and structures by adding the phrase ‘other non-public economy’ in addition to the individual and private economies (Art. 11 of the 2004 Constitution). Shen (2015), p. 27; Chen (2016), p. 630.

  93. 93.

    Chen (2016), p. 630.

  94. 94.

    Clarke (2005–2006), p. 66.

  95. 95.

    Ibid, p. 66.

  96. 96.

    Ye (2002), p. 7.

  97. 97.

    See Sect. 3.1.3 fn. 49.

  98. 98.

    See Sect. 3.2.2.2.

  99. 99.

    PRC Wholly Foreign-Owned Enterprise Law Detailed Implementing Regulations (中华人民共和国外资企业法实施细则), approved by the State Council on 28 October 1990 and promulgated by the Ministry of Foreign Economic Relations and Trade on 12 December 1990; amended on 12 April 2001, amended on 19 February 2014 and repealed on 01 January 2020.

  100. 100.

    Yang (杨杰) and Qu (曲天明) (2010), p. 65; Ye (2002), pp. 6–7, with further references.

  101. 101.

    Glatter (2016), p. 135.

  102. 102.

    Ye (2002), p. 7.

  103. 103.

    See Sect. 3.2.3.2.

  104. 104.

    Ye (2002), p. 7.

  105. 105.

    Ibid, p. 7.

  106. 106.

    Huang (黄毅诚) (1997), pp. 12–13.

  107. 107.

    Chen (2016), p. 628; Ye (2002), p. 8; Heuser (2002), pp. 385–386.

  108. 108.

    See Sect. 3.1.3 fn. 43.

  109. 109.

    Regulations of the Shenzhen Special Economic Zone on Partnerships (深圳经济特区合伙条例), promulgated by the Standing Committee of the Shenzhen Municipal People’s Congress on 20 April 1994 and effective as of 1 May 1994; repealed on 27 April 2012.

  110. 110.

    For a detailed analysis, see Heuser (2002), pp. 389–292 and Martinek (2018), pp. 200–201.

  111. 111.

    Wu and Geu (2007–2008), pp. 138–139.

  112. 112.

    Chap 2, Arts. 9–52 Shenzhen Partnership Regulations.

  113. 113.

    Chap 3, Arts. 53–69 Shenzhen Partnership Regulations.

  114. 114.

    Art. 2 Shenzhen Partnership Regulations.

  115. 115.

    Art. 53 Shenzhen Partnership Regulations.

  116. 116.

    Art. 10 Shenzhen Partnership Regulations.

  117. 117.

    Art. 54 Shenzhen Partnership Regulations.

  118. 118.

    Art. 57 Shenzhen Partnership Regulations.

  119. 119.

    Ye (2002), p. 9.

  120. 120.

    Huang (黄毅诚) (1997), p. 12.; Ye (2002), p. 9.

  121. 121.

    Huang (黄毅诚) (1997), p. 12.

  122. 122.

    Chen (2016), p. 654.

  123. 123.

    ibid, p. 655.

  124. 124.

    PRC Partnership Enterprise Law (中华人民共和国合伙企业法), adopted at the 24th Session of the Standing Committee of the 8th National People’s Congress on 23 February 1997 and effective from 1 August 1997.

  125. 125.

    Li (厉以宁) (1997), pp. 17–20; Xue (薛驹) (1997), pp. 21–22.

  126. 126.

    PRC Administrative Measures for Partnership Enterprise Registration (中华人民共和国合伙企业登记管理办法), promulgated by the State Council on 19 November 1997 and effective as of the same date.

  127. 127.

    Art. 1 1997 Partnership Enterprise Registration Measures.

  128. 128.

    Epstein and Shen (2009), p. I-6.1.38.

  129. 129.

    Münzel (2006a), p. 405.

  130. 130.

    Instructive with a comparative law approach, see: Gan (干勾) (2003).

  131. 131.

    This can be concluded from Article 107 of the 2006 version of the PEL, which stipulates that the regulations on the SGPE are also applicable for organisations from service sectors that do not allow registration as enterprise (e.g. law firms). See also Wang (王翔) (2006), item 4.

  132. 132.

    Münzel (2006a), pp. 405–406.

  133. 133.

    Bu (2017b), p. 191.

  134. 134.

    Garner (2009), p. 318.

  135. 135.

    Du (2014), p. 335; Werthwein (2010), p. 17; Bu (2017b), p. 191.

  136. 136.

    Art. 2 Partnership Law 1997.

  137. 137.

    Arts. 2 and 3 1997 PEL.

  138. 138.

    Ye (2002), p. 10.

  139. 139.

    Art. 2 1997 PEL.

  140. 140.

    Yuantao et al. (1989), p. 44.

  141. 141.

    Julius and Bitter (2005), p. 62.

  142. 142.

    ibid, pp. 62–63.

  143. 143.

    Art. 1 Para. 2 HGB.

  144. 144.

    Julius and Bitter (2005), p. 62.

  145. 145.

    For a detailed discussion, see Sect. 8.2.2.1.

  146. 146.

    Art. 9 1997 PEL.

  147. 147.

    Ye (2002), p. 25.

  148. 148.

    Arts. 11–13 GPCL/ Arts. 18–22 GRCL.

  149. 149.

    Art. 36 GPCL/ Art. 57 GRCL.

  150. 150.

    Wang (王翔) (2006), item 1.

  151. 151.

    Ye (2002), pp. 25–26.

  152. 152.

    Article 9 GPCL, using the term citizen (公民). For a discussion on why the term citizen is used in Chinese law instead of natural person, see also Chen (2016), pp. 470–477.

  153. 153.

    Art. 8 Para. 2 GPCL. Notably, Article 12 GRCL no longer differentiates between foreigners and Chinese nationals.

  154. 154.

    Chen (2016), p. 654; Liu (2014), p. 183.

  155. 155.

    Ye (2002), p. 26.

  156. 156.

    Ibid, p. 12.

  157. 157.

    Ibid, p. 12.

  158. 158.

    Ibid, p. 12.

  159. 159.

    Werthwein (2010), p. 45. Regarding the abolishment of the provisions on the Individual Partnership in the new General Rules of Civil Law, see discussion in Sect. 4.2.1.1.

  160. 160.

    Ye (2002), p. 12.

  161. 161.

    Ibid, p. 13; Heuser (2002), p. 389.

  162. 162.

    Art. 2 Regulations on Special Economic Zones in Guangdong Province (广东省经济特区条例), promulgated by the Standing Committee of the Guangdong Province People’s Congress on 15 April 1980, approved at the 15th Session of the Standing Committee of the 5th National People’s Congress on 26 August 1980, and effective as of the same date.

  163. 163.

    Xiao (晓富) (1997), p. 108.

  164. 164.

    Ye (2002), p. 13.

  165. 165.

    See also Sect. 4.1.5.4, with a clarifying statement that was issued by SAIC in the similar discussion with regard to the FIPE.

  166. 166.

    Chen (2016), p. 653.

  167. 167.

    Cao (曹德斌) and Zhang (张小奕) (2017), foreword p. 1; Yan (严义埙) (2006), p. 595.

  168. 168.

    Clarke (2007), p. 573.

  169. 169.

    Yang (杨杰) and Qu (曲天明) (2010), p. 63; Chen (2016), p. 654; Epstein and Shen (2009), p. I-6.1.38-39; McKenzie and Mendel (2007), p. 32.

  170. 170.

    Yan (严义埙) (2006), pp. 595–596; Wang (王翔) (2006), first paragraph.

  171. 171.

    Yan (严义埙) (2006), pp. 595–596.

  172. 172.

    Howson (2015), p. 395.

  173. 173.

    Ye (2002), p. 11.

  174. 174.

    Clarke (2007), p. 573.

  175. 175.

    Howson (2015), p. 396.

  176. 176.

    Chen (2016), pp. 654–655.

  177. 177.

    Clarke (2007), p. 573.

  178. 178.

    Yan (严义埙) (2006), p. 595.

  179. 179.

    Ibid, p. 595.

  180. 180.

    Ibid, p. 595.

  181. 181.

    Cao (曹德斌) and Zhang (张小奕) (2017), foreword p. 1.

  182. 182.

    Hong (洪虎) (2006b), p. 602.

  183. 183.

    Chen (2016), p. 655 fn. 114.

  184. 184.

    PRC Partnership Enterprise Law (中华人民共和国合伙企业法), adopted at the 24th Session of the Standing Committee of the 8th National People’s Congress on 23 February 1997; amended at the 23rd Session of the Standing Committee of the 10th National People’s Congress on 27 August 2006 and effective from 1 June 2007.

  185. 185.

    PRC Administrative Measures for Partnership Enterprise Registration (中华人民共和国合伙企业登记管理办法), promulgated by the State Council on 19 November 1997, amended on 9 May 2007, amended on 19 February 2014 and amended on 2 March 2019.

  186. 186.

    Circular on Proper Registration of Partnership Enterprise (做好合伙企业登记管理工作的通知), promulgated by the State Administration for Industry and Commerce on 29 May 2007 and effective as of the same date.

  187. 187.

    A comprehensive account of the relevant laws and regulations is provided in Cao (曹德斌) and Zhang (张小奕) (2017).

  188. 188.

    See Sect. 4.1.3.3.1.

  189. 189.

    Regarding SPC interpretations of laws, see Sect. 3.1.3.

  190. 190.

    Art. 45 Legislation Law.

  191. 191.

    Art. 50 Legislation Law.

  192. 192.

    Li (李飞) (ed) (2006).

  193. 193.

    Ibid, p. 1.

  194. 194.

    Besides LI Fei (李飞), authors are YUAN Jie (袁杰), WANG Qing (王清), LI Jianguo (李建国), WANG Xiang (王翔) and CHEN Yangyue (陈扬跃).

  195. 195.

    Fleischer (2011), pp. 347–348.

  196. 196.

    This has been unequivocally expressed during interviews with Chinese scholars and practitioners by the author.

  197. 197.

    Münzel (2006a), p. 405.

  198. 198.

    Wang (王翔) (2006), first paragraph.

  199. 199.

    Cao (曹德斌) and Zhang (张小奕) (2017), foreword p. 2.

  200. 200.

    Chen (2016), p. 655.

  201. 201.

    Art. 2 Para. 1 PEL.

  202. 202.

    See Sects. 8.2.1 and 8.3.1; Chen (2016), pp. 655–656.

  203. 203.

    See the discussion in Sect. 4.1.3.2.

  204. 204.

    For an overview of UK, US, French and German law, see Windbichler (2014), pp. 116–118. Regarding the German HGB, also see Sect. 3.1.1.

  205. 205.

    See the discussion in Sect. 4.1.4.4.

  206. 206.

    Art. 18 No 5 PEL.

  207. 207.

    Art. 18 No 2 PEL.

  208. 208.

    Li (李飞) (ed) (2006), p. 4.

  209. 209.

    Regarding the concept of business scope in Chinese law, see Sect. 3.1.6.1.2.

  210. 210.

    Arts. 14–19, 56, 61–66 PEL.

  211. 211.

    Arts. 20–25, 72–74 PEL.

  212. 212.

    Arts. 26–36, 67–68 PEL.

  213. 213.

    Arts. 37–42, 57–59, 76 PEL.

  214. 214.

    Arts. 43–54, 77–81 PEL.

  215. 215.

    Arts. 75, 85–92 PEL.

  216. 216.

    Arts. 93–106 PEL.

  217. 217.

    Art. 2 Para. 1 PEL.

  218. 218.

    Zhu (朱慈蕴) (2008), p. 77; Zhu (朱少平) (2006), item 3.

  219. 219.

    See Sect. 8.2.2.1.

  220. 220.

    Lin (2010), p. 259.

  221. 221.

    Art. 57 PEL.

  222. 222.

    Lin (2010), p. 259.

  223. 223.

    For further analysis, see Sect. 4.2.2.2.

  224. 224.

    Huang (黄毅诚) (1997), pp. 12–13.

  225. 225.

    Cao (曹德斌) and Zhang (张小奕) (2017), foreword p. 2.

  226. 226.

    Yan (严义埙) (2006), pp. 596–597; Wang (王翔) (2006), item 4.

  227. 227.

    Hong (洪虎) (2006b), pp. 354–355.

  228. 228.

    Arts. 55–59 PEL.

  229. 229.

    Article 55 Para. 3 PEL, making reference to Sections 1 to 5 of Chapter 2 of the PEL.

  230. 230.

    Hong (洪虎) (2006a), pp. 602–603.

  231. 231.

    Ibid, pp. 602–603.

  232. 232.

    Lin (2010), p. 262.

  233. 233.

    Ibid, p. 262.

  234. 234.

    Huang (黄毅诚) (1997), p. 12–13.

  235. 235.

    Lin (2010), pp. 259–260.

  236. 236.

    Art. 1 German Partnership Enterprise Law (Partnerschaftsgesellschaftsgesetz), promulgated on 30 July 1994; last amended on 22 December 2015.

  237. 237.

    Art. 55 Para. 1 PEL.

  238. 238.

    Werthwein (2010), p. 46.

  239. 239.

    Julius and Bitter (2005), p. 62.

  240. 240.

    Ibid, p. 62.

  241. 241.

    Hong (洪虎) (2006b), pp. 354, 356; Werthwein (2010), p. 46.

  242. 242.

    Julius and Bitter (2005), p. 62.

  243. 243.

    For the discussion, see Hong (洪虎) (2006b), pp. 354, 356.

  244. 244.

    Art. 15 Para. 2 PRC Law on Lawyers (中华人民共和国律师法), adopted at the 19th Session of the Standing Committee of the 9th National People’s Congress on 15 May 1996; amended at the 25th Session of the Standing Committee of the 9th National People’s Congress on 29 December 2001, amended at the 30th Session of the Standing Committee of the 10th National People’s Congress on 28 October 2007, amended at the 29th Session of the Standing Committee of the 11th National People’s Congress on 26 October 2012, and amended at the 29th Session of the Standing Committee of the 12th National People’s Congress on 01 September 2017 and with effect as of 01 January 2018.

  245. 245.

    Lin (2010), p. 265.

  246. 246.

    Art. 2 Para. 3, Arts. 60–84 PEL.

  247. 247.

    Huang (黄毅诚) (1997), p. 15.

  248. 248.

    Li (厉以宁) (1997), pp. 17–18.

  249. 249.

    Wu and Geu (2007–2008), p. 140.

  250. 250.

    Ibid, p. 140.

  251. 251.

    Chen (2016), p. 658 fn. 125; Wu and Geu (2007–2008), p. 140 fn. 20.

  252. 252.

    Werthwein (2010), p. 46.

  253. 253.

    Regulations on the Zhongguancun Science and Technology Park (中关村科技园区条例), promulgated by the Standing Committee of the Beijing Municipal People’s Congress on 8 December 2000 and repealed on 23 December 2010.

  254. 254.

    Art. 25 Regulations on the Zhongguancun Science and Technology Park.

  255. 255.

    Clarke (2005–2006), p. 59.

  256. 256.

    Ibid, p. 60.

  257. 257.

    Chen (2016), pp. 657–658.

  258. 258.

    Yan (严义埙) (2006), p. 596.

  259. 259.

    Lin and Yeo (2010), p. 104.

  260. 260.

    Wu and Geu (2007–2008), p. 139.

  261. 261.

    Article 60 PEL, making reference to Sections 1 to 5 of Chapter 2 of the PEL.

  262. 262.

    Wu and Geu (2007–2008), p. 137.

  263. 263.

    Arts. 161-177a, Art. 161 Para. 2 HGB.

  264. 264.

    The term ‘US law’ is used because the majority of the States have, albeit with deviations in details, adopted the Uniform Acts, Uniform Limited Partnership Act (fn. 266 below) and Revised Uniform Partnership Act (see Sect. 4.2.2.2 fn. 663).

  265. 265.

    Lin (2013a), p. 212.

  266. 266.

    Uniform Limited Partnership Act (2001), promulgated by the National Conference of Commissioners on Uniform State Laws in 2001, amended in 2011 and 2013.

  267. 267.

    2001 Prefatory Note to the ULPA. For a detailed account on the legislative history of the ULPA, see Wu and Geu (2007–2008), pp. 141–142.

  268. 268.

    Bu (2017b), p. 192.

  269. 269.

    Zhang (2011), pp. 868–869; Julius and Bitter (2005), p. 63; Chen (2016), p. 661; Li (李飞) (ed) (2006), pp. 1–2.

  270. 270.

    Howson (2015), pp. 396–397.

  271. 271.

    Lin (2013b), p. 220 fn. 10.

  272. 272.

    Lin and Yeo (2010), p. 107.

  273. 273.

    Howson (2015), p. 410.

  274. 274.

    Art. 108 PEL.

  275. 275.

    Werthwein (2010), p. 48; Liu (2008), p. 83.

  276. 276.

    See Sects. 3.1.5 and 3.2.3.2.

  277. 277.

    Art. 4 Partnership Enterprise Administrative Circular. However, this construction of an FIE investing in a domestic partnership raises various questions, e.g. the FIE Reinvestment Provisions provide in Article 4 that FIEs can only establish new enterprises that take the form of a limited liability company or joint stock company. The lawfulness of such an FIE-partnership investment structure therefore requires further analysis which falls outside of the scope of the research question at hand.

  278. 278.

    Hong (洪虎) (2006a), pp. 602, 604.

  279. 279.

    Ibid, p. 604.

  280. 280.

    Hong (洪虎) (2006b), p. 357.

  281. 281.

    Wang (王翔) (2006), item 6.

  282. 282.

    Hong (洪虎) (2006b), p. 357.

  283. 283.

    Art. 108 PEL.

  284. 284.

    Explanations on the Draft Administrative Measures for Foreign-Invested Partnership Enterprises (外商投资合伙企业管理办法(送审稿)起草说明), promulgated by the Ministry of Commerce on 23 January 2007, <http://www.mofcom.gov.cn/aarticle/bh/200703/20070304413077.html>, accessed 15 May 2020.

  285. 285.

    Ibid.

  286. 286.

    Draft Administrative Measures for Foreign-Invested Partnership Enterprises (外商投资合伙企业管理办法(送审稿)), promulgated by the Ministry of Commerce on 23 January 2007, <http://www.mofcom.gov.cn/aarticle/bh/200703/20070304413083.html>, accessed 15 May 2020; for an analysis of the Draft FIPE Measures see: Liu (2008), pp. 83–100.

  287. 287.

    Fu (傅明) (2008), p. 74.

  288. 288.

    Cui (2008), p. 30.

  289. 289.

    Ibid, p. 30.

  290. 290.

    Shaddox (2013), p. 470.

  291. 291.

    Mahony (2015), p. 68.

  292. 292.

    Ibid, pp. 68–73.

  293. 293.

    Measures for the Administration of the Establishment of Partnership Enterprises by Foreign Enterprises or Individuals in the Territory of China (外国企业或者个人在中国境内设立合伙企业管理办法), promulgated by the State Council on 25 November 2009 and effective as of 1 March 2010.

  294. 294.

    Administrative Provisions for the Registration of Foreign-Invested Partnership Enterprises (外商投资合伙企业登记管理规定), promulgated by the State Administration of Industry and Commerce on 29 January 2010 with effect from 1 March 2010, amended on 20 February 2014 and amended on 8 August 2019.

  295. 295.

    Circular on Implementing the Measures for the Administration of the Establishment of Partnership Enterprises by Foreign Enterprises or Individuals in China (《外国企业或者个人在中国境内设立合伙企业管理办法》贯彻实施工作的通知), promulgated by the State Administration for Industry and Commerce on 10 February 2010 and repealed on 31 May 2016.

  296. 296.

    Wang and Yong (2010), p. 15.

  297. 297.

    Jiao and Kasteleijn (2011), p. 58.

  298. 298.

    Art. 2 Para. 2 FIPE Provisions.

  299. 299.

    Art. 2 FIPE Measures; Art. 2 Para. 1 FIPE Provisions.

  300. 300.

    Art. 15 FIPE Measures.

  301. 301.

    Art. 11 FIPE Provisions.

  302. 302.

    Art. 3 Para. 2 FIPE Provisions.

  303. 303.

    Regarding the limitations, see Sect. 4.1.7.

  304. 304.

    Howson (2015), p. 399.

  305. 305.

    Art. 4 FIPE Measures, Art. 14 FIPE Provisions.

  306. 306.

    Art. 5 FIPE Provisions. Additionally, see Sect. 4.1.8.

  307. 307.

    See Sect. 4.1.9.3.

  308. 308.

    See Sect. 4.1.9.3.

  309. 309.

    Münzel (2006b), p. 425 fn. 13.

  310. 310.

    Art. 3 Para. 1 FIPE Measures; Art. 3 Para. 1, Art. 6 Para. 1, Art. 31 FIPE Provisions.

  311. 311.

    Art. 88 Para. 1 Legislation Law.

  312. 312.

    Yang (杨杰) and Qu (曲天明) (2010), pp. 63–64.

  313. 313.

    Formulating administrative regulations for the implementation of laws is one of the core responsibilities of the State Council (Art. 65 Para. 1 (1) Legislation Law); Yang (杨杰) and Qu (曲天明) (2010), pp. 63–64.

  314. 314.

    Stursberg (2014), p. 14.

  315. 315.

    See Sect. 3.1.3.

  316. 316.

    Art. 85 Constitution.

  317. 317.

    Art. 4 Para. 5 Partnership Registration Measures.

  318. 318.

    Art. 1 FIPE Provisions. A similar reference is found in the FIPE Measures, which stipulate in Article 10 that the establishment of a FIPE has to be in accordance with the Partnership Registration Measures and other relevant national regulations.

  319. 319.

    For example, notarisation and legalisation requirements for foreign documents, Article 12, Para. 4 FIPE Provisions, or the impact of the Guidance Catalogue, Article 42, Para. 3 FIPE Provisions.

  320. 320.

    For instance, Article 14 FIPE Provisions.

  321. 321.

    Art. 3 Para. 3 FIPE Provision. Also, see analysis in Sect. 4.1.7.

  322. 322.

    See Sect. 3.2.2.2.

  323. 323.

    Yang (杨杰) and Qu (曲天明) (2010), pp. 64–65; Fu (傅明) (2008), p. 74; Werthwein (2010), pp. 48–49.

  324. 324.

    Art. 92 Legislation Law.

  325. 325.

    Art. 92 Legislation Law.

  326. 326.

    Art. 88 Para. 2 Legislation Law.

  327. 327.

    See Sect. 3.1.3.

  328. 328.

    Art. 36 Draft FIPE Measures.

  329. 329.

    Art. 3 Para. 1 FIPE Implementation Circular. In a strict sense, however, it would have been the role of the State Council to resolve this conflict. See Art. 94 Para. 1 Legislation Law.

  330. 330.

    Yang (杨杰) and Qu (曲天明) (2010), pp. 64–65; Fu (傅明) (2008), p. 74; Xu (徐春雷) and Cao (曹秀峰) (2007), p. 29. Regarding the impact of the Draft Foreign Investment Law on the CJV, see Sect. 3.1.5.3.

  331. 331.

    See Sect. 3.2.2.

  332. 332.

    See Sect. 3.1.5.

  333. 333.

    Art. 2 Para. 2 No 1 FIL.

  334. 334.

    Art. 2 Para. 2 No 2 FIL.

  335. 335.

    See Sect. 9.1.

  336. 336.

    Art. 31 FIL. See also Sect. 3.1.5.3.

  337. 337.

    See Sect. 4.1.5.3.

  338. 338.

    This stipulation is reiterated in Art. 44 Para. 1 FIL Implementing Regulations.

  339. 339.

    See Sect. 3.1.5.4.

  340. 340.

    See Sect. 3.1.5.5.

  341. 341.

    See Sect. 3.1.6.3.2.

  342. 342.

    For an analysis of the guidance and restrictions on FIEs in general, see Sect. 3.1.6.

  343. 343.

    Art. 13 FIPE Measures; Art. 3 Para. 3 FIPE Provisions.

  344. 344.

    Note No 4 to the FDI Negative List in the Guidance Catalogue.

  345. 345.

    Art. 63 in conjunction with Art. 3 Para. 3 FIPE Provisions.

  346. 346.

    Shaddox (2013), p. 473; Pissler (2010), pp. 125–131.

  347. 347.

    Art. 7 Para. 2 Draft FIPE Measures.

  348. 348.

    For a detailed account, see Sect. 3.1.6.3.3 fn. 348–353.

  349. 349.

    Item 20 2019 FDI Negative List in the Guidance Catalogue.

  350. 350.

    Item 22 2019 FDI Negative List in the Guidance Catalogue.

  351. 351.

    Item 33 2019 FDI Negative List in the Guidance Catalogue.

  352. 352.

    Item 10 2019 FDI Negative List in the Guidance Catalogue: production of satellite, television and radio ground receiving facilities and key parts.

  353. 353.

    See Sect. 3.1.6.3.3.

  354. 354.

    See Sect. 3.1.6.3.3.

  355. 355.

    See Sect. 3.1.6.1.2.

  356. 356.

    Art. 7 Para. 4 FIPE Provisions.

  357. 357.

    Mahony (2015), p. 231.

  358. 358.

    Circular on Usage of Business Licence for Foreign Investment Partnership Enterprise and Business Licence for Branches of Foreign Investment Partnership Enterprise (启用《外商投资合伙企业营业执照》和《外商投资合伙企业分支机构营业执照》的通知), promulgated by the State Administration for Industry and Commerce on 12 February 2010 and repealed on 14 July 2014.

  359. 359.

    Art. 5 Para. 1, Art. 6 FIPE Measures; Arts. 4 and 5 FIPE Provisions.

  360. 360.

    Art. 5 Para. 2 FIPE Provisions. For a FIPE mainly engaged in investments (PE and VC funds), the provincial level department of SAMR is the responsible authority (Art. 5 Para. 3 FIPE Provisions).

  361. 361.

    Art. 4 Para. 3 Partnership Registration Measures.

  362. 362.

    Mahony (2015), p. 231.

  363. 363.

    Arts. 9, 20 Draft FIPE Measures.

  364. 364.

    Art. 1 Para. 2 FIPE Implementation Circular.

  365. 365.

    Yu (虞亚光) (2010), p. 43; Wang and Yong (2010), p. 15; Liu (2010), pp. 37–38.

  366. 366.

    See Sect. 3.1.6.3.

  367. 367.

    Art. 12 Para. 2 No 7 FIPE Provisions.

  368. 368.

    Lu (吕美昂) (2011), p. 82; Wang and Yong (2010), p. 16.

  369. 369.

    Art. 44 FIPE Provisions.

  370. 370.

    Wang and Yong (2010), p. 16; Liu (2010), pp. 37–38.

  371. 371.

    Art. 1 Para. 3 FIPE Implementation Circular.

  372. 372.

    See Sect. 3.1.6.3.1.

  373. 373.

    See Sect. 3.1.6.3.1.

  374. 374.

    Art. 1 Reporting Notice.

  375. 375.

    A lease contract or equivalent of the principal business premise must be submitted. The principal business premise is the place where the administrative headquarter of the partnership enterprise is located. See Gao (高富平) et al. (1997), p. 151. The principal business premise must be located within the geographic area of its responsible SAMR (Art. 9 FIPE Provisions).

  376. 376.

    Art. 54 FIPE Provisions; Art. 8 FIPE Provisions in conjunction with Art. 7 Partnership Enterprise Registration Measures.

  377. 377.

    Art. 8 FIPE Provisions in conjunction with Art. 2 Partnership Enterprise Administrative Circular.

  378. 378.

    Art. 54 FIPE Provisions.

  379. 379.

    Administrative Provisions for the Enterprise Name Registration (企业名称登记管理规定), promulgated on 22 July 1991 and amended on 9 November 2012 with effect as of 01 January 2013. This requirement is stipulated in Art. 8 FIPE Provisions.

  380. 380.

    Art. 19 Para. 2 HGB.

  381. 381.

    Heidinger (2016), p. 499.

  382. 382.

    Ibid, pp. 378, 499.

  383. 383.

    Regarding the discussion in Germany, see Heidinger (2016), p. 499; Raiser and Veil (2015), p. 657; Teichmann (2014), pp. 238–239.

  384. 384.

    Art. 12 Para. 1 FIPE Provisions.

  385. 385.

    Art. 12 Para. 4 FIPE Provisions.

  386. 386.

    Art. 12 Para. 5 FIPE Provisions.

  387. 387.

    Art. 11 Para. 2 Partnership Enterprise Registration Measures.

  388. 388.

    Art. 17 FIPE Provisions.

  389. 389.

    Art. 4 FIPE Provisions. Regarding the liability of partners before legal establishment of the FIPE, see Sect. 8.4.1.

  390. 390.

    Art. 201 ULPA.

  391. 391.

    Grunewald (2019), p. 10. For more detail, see also Sect. 8.4.1.

  392. 392.

    Ibid, p. 10.

  393. 393.

    Art. 42 Para. 1 FIPE Provisions.

  394. 394.

    Art. 42 Para. 2 FIPE Provisions.

  395. 395.

    Art. 42 Para. 2 FIPE Provisions.

  396. 396.

    Interview with a partner of a foreign law firm in Shanghai that the author has conducted in April 2020.

  397. 397.

    Art. 42 Para. 3 FIPE Provisions.

  398. 398.

    Pissler (2010), p. 128.

  399. 399.

    Art. 43 FIPE Provisions.

  400. 400.

    Art. 3 Para. 2 FIPE Implementation Circular.

  401. 401.

    Art. 2 2014 Foreign Investment Measures.

  402. 402.

    Art. 4 Para. 1 2014 Foreign Investment Measures. Regarding the limited use of FIPEs in the restricted category of the FDI Negative List in the Guidance Catalogue, see Sect. 4.1.7.

  403. 403.

    Art. 66 FIPE Provisions.

  404. 404.

    Mahony (2015), p. 317.

  405. 405.

    Arts. 8–9 Interim Regulations on the Disclosure of Enterprise Information (企业信息公示暂行条例), promulgated by the State Council 7 August 2014 and effective as of 1 October 2014, (Enterprise Information Regulations).

  406. 406.

    Art. 1 Reporting Notice.

  407. 407.

    Art. 12 FIPE Measures; Art. 63 FIPE Measures.

  408. 408.

    Arts. 18–30 FIPE Provisions.

  409. 409.

    Shaddox (2013), p. 472; Cui (2008), p. 30.

  410. 410.

    Schmidt (2002), p. 75.

  411. 411.

    Arts. 4–5 PEL.

  412. 412.

    Instructive: Schmidt (2002), pp. 75–80; Wiedemann (2004), pp. 89–95.

  413. 413.

    Wiedemann (2004), p. 90.

  414. 414.

    Westermann (2017), § 5 No 132; Schmidt (2002), p. 547. For the detailed discussion, see Sect. 7.1.2.1.

  415. 415.

    Schmidt (2002), p. 77.

  416. 416.

    Zhang (张桂龙) and Liu (刘淑强) (1997), p. 41.

  417. 417.

    Ibid, p. 41.

  418. 418.

    Ibid, p. 41.

  419. 419.

    Art. 5 PEL. For a more detailed analysis of these principles in respect to the partnership enterprise, see Zhang (张桂龙) and Liu (刘淑强) (1997), p. 42.

  420. 420.

    Art. 4 GPCL/Arts. 5–7 GRCL.

  421. 421.

    Especially Article 55 GPCL/Article 143 GRCL.

  422. 422.

    For example, Articles 9–43 Contract Law.

  423. 423.

    Li (李飞) (ed) (2006), p. 7. At the time of writing of this book, the comprehensive Civil Code has not yet been promulgated by the NPC. For respective provisions on partnership agreements, see Art. 751 of the PRC Civil Code (Draft) ( 中华人民共和国民法典 (草案)), issued by the NPC in November and December 2019.

  424. 424.

    Zhang (张桂龙) and Liu (刘淑强) (1997), pp. 41–42.

  425. 425.

    Art. 20 PEL; Zhang (张桂龙) and Liu (刘淑强) (1997), pp. 41–42.

  426. 426.

    Art. 32 PEL; Li (李飞) (ed) (2006), p. 156.

  427. 427.

    Su (苏号朋) and Wang (王斌来) (1997), pp. 28–29.

  428. 428.

    Gao (高富平) et al. (1997), p. 140.

  429. 429.

    Art. 31 GPCL.

  430. 430.

    Huang (黄毅诚) (1997), p. 14.

  431. 431.

    Item 50 Opinions on Certain Issues Concerning the Implementation of the ‘General Principles of Civil Law of the PRC’ (Trial) (贯彻执行《中华人民共和国法通则》若干问题的意见 (试行)), promulgated by the Supreme People’s Court on 26 January 1988 and revised on 18 December 2008 with effect as of 24 December 2008 (Opinion of the SPC on the Implementation of the GPCL).

  432. 432.

    Item 50 Opinion of the SPC on the Implementation of the GPCL.

  433. 433.

    Münzel (2006a), pp. 405–406.

  434. 434.

    Chen (2014a), p. 68.

  435. 435.

    See Sect. 4.1.10.

  436. 436.

    Li (李飞) (ed) (2006), p. 102.

  437. 437.

    Art. 18 No 1 PEL. See Sect. 4.1.8.2.

  438. 438.

    Art. 18 No 1 PEL. See Sect. 4.1.8.2 fn. 375.

  439. 439.

    The objective of the partnership enterprise describes the goal that it aims to pursue. It is not necessarily identical to the individual objective of each partner. Rather, the partners must combine their respective objectives to identify a common objective that the partnership enterprise shall pursue (Li (李飞) (ed) (2006), p. 27.

  440. 440.

    Art. 18 No 2 PEL. See Sect. 4.1.7.

  441. 441.

    Art. 18 No 3, Art. 63 No 1 PEL.

  442. 442.

    Art. 18 No 4 PEL.

  443. 443.

    Art. 18 No 5 PEL.

  444. 444.

    Art. 18 No 6, Art. 63 No 2–4 PEL.

  445. 445.

    Art. 18 No 7, Art. 63 No 5 PEL. For a further analysis, see Sect. 9.3.

  446. 446.

    Art. 18 No 8 PEL. For a further analysis, see Sect. 4.1.9.5.

  447. 447.

    Art. 18 No 9 PEL. For a further analysis, see Sect. 9.2.2.

  448. 448.

    Art. 18 No 10 PEL. For a further analysis, see Sect. 8.4.5.

  449. 449.

    Art. 63 No 6 PEL. For a further analysis, see Sect. 9.3.5.

  450. 450.

    Werthwein (2010), p. 49.

  451. 451.

    Howson (2015), p. 402.

  452. 452.

    Ibid, p. 402.

  453. 453.

    Li (李飞) (ed) (2006), pp. 30–31.

  454. 454.

    Howson (2015), p. 402.

  455. 455.

    Li (李飞) (ed) (2006), pp. 29–30.

  456. 456.

    Ibid, p. 30.

  457. 457.

    Arts. 45–46 PEL. Additionally, see Sect. 9.3.2.

  458. 458.

    Yu et al. (2012b), p. 13.

  459. 459.

    Lin (2013a), p. 206.

  460. 460.

    Ibid, p. 206.

  461. 461.

    Li (李飞) (ed) (2006), p. 31.

  462. 462.

    Kroymann (2009), pp. 126–127.

  463. 463.

    Lin (2013a), p. 212; Lin (2011), p. 213.

  464. 464.

    Armour et al. (2017), p. 21.

  465. 465.

    Ibid, pp. 20–21.

  466. 466.

    Ibid, p. 21.

  467. 467.

    European Court of Justice, Case C-212/97, Centros [1999], ECR 1999 I-1459; European Court of Justice, Case C-20/00, Überseering [2002], ECR 2002 I-9919; European Court of Justice, Case C-167/01, Inspire Art. [2003], ECR 2003 I-10155.

  468. 468.

    Armour et al. (2017), p. 21.

  469. 469.

    Ibid, p. 21.

  470. 470.

    Herbert Smith Freehills LLP (2016), p. 7.

  471. 471.

    The later analysis will show that the determination of the applicable law in a FILPE with a foreign corporate general partner reaches an additional level of complexity. See Sects. 8.2.2.2.1 and 8.2.2.2.3.

  472. 472.

    PRC Law on the Application of Laws to Foreign-Related Civil Relations (中华人民共和国涉外民事关系法律适用法), adopted at the 17th Session of the Standing Committee of the 11th National People’s Congress on 28 October 2010 and effective as of 1 April 2011.

  473. 473.

    Art. 2 Para. 1 Foreign-Related Civil Relations Law.

  474. 474.

    Art. 1 First Interpretation of Certain Issues Concerning the Application of the ‘PRC Law on the Application of Laws to Foreign-Related Civil Relations’ (适用《中华人民共和国涉外民事关系法律适用法》若干问题的解释(一)), promulgated by the Supreme People’s Court on 28 December 2012 and with effect as of 7 January 2013 (SPC Interpretation of the Foreign-Related Civil Relations Law).

  475. 475.

    Art. 1 No 1 SPC Interpretation of the Foreign-Related Civil Relations Law.

  476. 476.

    Chen (2014b), pp. 53–54.

  477. 477.

    Ibid, p. 54.

  478. 478.

    Art. 126 Para. 2 Contract Law; Art. 12 EJV Implementing Regulations; Art. 55 CJV Implementing Regulations; Art. 2 Para. 1 WFOE Implementing Regulations.

  479. 479.

    Art. 6 SPC Interpretation of the Foreign-Related Civil Relations Law.

  480. 480.

    Du (2014), p. 341.

  481. 481.

    Art. 14 Foreign-Related Civil Relations Law.

  482. 482.

    Du (2014), p. 348.

  483. 483.

    Art. 14 Para. 1 Foreign-Related Civil Relations Law.

  484. 484.

    Regarding the legal nature of the FILPE, see Sect. 7.1.1.1.

  485. 485.

    Kindler (2018), p. 1682.

  486. 486.

    Ibid, pp. 1682–1683.

  487. 487.

    Ibid, p. 1683.

  488. 488.

    Huang (2014), p. 6.

  489. 489.

    Cuniberti (2017), p. 4.

  490. 490.

    Ibid, p. 16.

  491. 491.

    Du (2014), p. 334.

  492. 492.

    Leibküchler ultimately reaches the same conclusion by stating that all types of FIEs are subject to Chinese law as governing law (Leibküchler 2017, p. 122).

  493. 493.

    Art. 3 SPC Interpretation of the Foreign-Related Civil Relations Law.

  494. 494.

    See Sect. 8.2.

  495. 495.

    Li (李飞) (ed) (2006), p. 28.

  496. 496.

    Art. 18 No 8 PEL.

  497. 497.

    Art. 103 Para. 2 PEL.

  498. 498.

    Li (李飞) (ed) (2006), p. 29.

  499. 499.

    Herbert Smith Freehills LLP (2016), p. 33.

  500. 500.

    Kroymann (2009), pp. 17–19.

  501. 501.

    Ibid, p. 18; Cohen and Lange (1997), p. 351.

  502. 502.

    Yang (杨杰) and Qu (曲天明) (2010), pp. 63–66; Li (李飞) (ed) (2006), p. 164; Roos and Steinberg (2012), 27; Herbert Smith Freehills LLP (2016), p. 15.

  503. 503.

    PRC Arbitration Law (中华人民共和国仲裁法), adopted at the 9th Session of the Standing Committee of the 8th National People’s Congress on 31 August 1994, amended on 27 August 2009 and effective as of the same date.

  504. 504.

    Exemplary, see Trakman (2015), pp. 131–194; Lianbin et al. (2016), pp. 1–51; Herbert Smith Freehills LLP (2016), pp. 13–37; Li (李飞) (ed) (2006), p. 163.

  505. 505.

    Convention on the Recognition and Enforcement of Foreign Arbitral Awards, promulgated by the Secretary-General of the United Nations and effective as of 7 June 1959.

  506. 506.

    ‘Commercial’ excludes, for example, sports arbitral awards between a private person and the Chinese government; Herbert Smith Freehills LLP (2016), pp. 23–24.

  507. 507.

    Herbert Smith Freehills LLP (2016), p. 23.

  508. 508.

    Art. 103 Para. 2 PEL.

  509. 509.

    Art. 103 Para. 3 PEL.

  510. 510.

    Li (李飞) (ed) (2006), p. 28.

  511. 511.

    Hübner (2014); Peerenboom (2010).

  512. 512.

    Art. 7 Para. 2 EJV Implementing Regulations; Art. 7 Para. 2 CJV Implementing Regulations; Art. 10 Para. 2 WFOE Implementing Regulations.

  513. 513.

    Art. 42 Para. 1 FIPE Provisions.

  514. 514.

    Art. 125 Para. 2 Contract Law.

  515. 515.

    Chow (2002), p. 68.

  516. 516.

    Harris (2009).

  517. 517.

    Mahony (2015), p. 332; Chow (2002), p. 68.

  518. 518.

    Art. 19 Para. 1 PEL.

  519. 519.

    Art. 5 Para. 1, Art. 6 FIPE Measures; Arts. 4–5 FIPE Provisions.

  520. 520.

    Li (李飞) (ed) (2006), p. 30.

  521. 521.

    ibid, p. 30.

  522. 522.

    Howson (2015), p. 406.

  523. 523.

    ibid, p. 406.

  524. 524.

    ibid, pp. 406–407.

  525. 525.

    ibid, p, 356.

  526. 526.

    ibid, p. 356; Clarke (2005–2006), p. 55.

  527. 527.

    Howson (2010), p. 356.

  528. 528.

    ibid, pp. 356–357.

  529. 529.

    ibid, pp. 357–358.

  530. 530.

    ibid, p. 361.

  531. 531.

    ibid, p. 362.

  532. 532.

    ibid, p. 362.

  533. 533.

    Su Qi et al v Li Zhanfei et al, application for retrial of civil ruling on dispute over recognition of equity interest and profit distribution (苏琪与府谷县老高川乡恒益煤矿、李占飞、李维斌、李旺荣股权确认及分配利润纠纷申请再审民事裁定书), Supreme People’s Court of the PRC, Case No 2014/20 (最高人民法院(2014)民申字第20号) , judgment date: 26 January 2014, available at <http://www.court.gov.cn/wenshu/xiangqing-2539.html>, accessed 15 May 2020.

  534. 534.

    Ibid.

  535. 535.

    Howson (2010), p. 362.

  536. 536.

    Howson (2015), p. 409.

  537. 537.

    Ibid, p. 409.

  538. 538.

    Haase (2014), pp. 3, 8.

  539. 539.

    Essers and Meussen (2004), p. 415.

  540. 540.

    Respective examples are Liu (2014), pp. 183–215; Meyer (2016), pp. 203–222.

  541. 541.

    Ribstein (1988), p. 871.

  542. 542.

    ibid, p. 873.

  543. 543.

    Fleischer and Wansleben (2017), pp. 176–177; Raiser and Veil (2015), p. 658.

  544. 544.

    Fleischer and Wansleben (2017), pp. 176–177.

  545. 545.

    Liu (2014), pp. 183–215; Meyer (2016), pp. 203–222.

  546. 546.

    Werthwein (2010), p. 47; Li (李飞) (ed) (2006), p. 9.

  547. 547.

    Circular Concerning Collecting Individual Income Tax from Investors of Sole Proprietorship Enterprises and Partnership Enterprises (关于个人独资企业和合伙企业投资者征收个人所得税的规定的通知), jointly promulgated by the Ministry of Finance and State Administration of Taxation on 19 September 2000, amended on 10 April 2006, amended on 3 June 2008 and amended on 29 July 2011.

  548. 548.

    Circular on Issues Concerning Income Tax for Partners of Partnership Enterprises (关于合伙企业合伙人所得税问题的通知), promulgated jointly by the Ministry of Finance and State Administration of Taxation on 23 December 2008 and effective as of 1 January 2008.

  549. 549.

    Art. 3 Tax Circular 159, Art. 6 PEL.

  550. 550.

    PRC Law on Enterprise Income Tax (中华人民共和国企业所得税法), adopted at the 5th Session of the 10th National People’s Congress on 16 March 2007, amended at the 26th session of the Standing Committee of the 12th National People’s Congress on 24 February 2017, amended at the 7th Session of the Standing Committee of the 13th National People’s Congress on 29 December 2018 with effect as of the same day.

  551. 551.

    Art. 2 Enterprise Income Tax Law.

  552. 552.

    Art. 2 Tax Circular 159; Art. 6 PEL.

  553. 553.

    Art. 4 Enterprise Income Tax Law.

  554. 554.

    Art. 3 Para. 2 PRC Law on Individual Income Tax (中华人民共和国个人所得税法), adopted at the 3rd Session of the 5th National People’s Congress on 10 September 1980, amended at the 4th Session of the Standing Committee of the 8th National People’s Congress on 31 October 1993, amended at the 11th Session of the Standing Committee of the 9th National People’s Congress on 30 August 1999, amended at the 18th Session of the Standing Committee of the 10th National People’s Congress on 27 October 2005, amended at the 28th Session of the Standing Committee of the 10th National People’s Congress on 29 June 2007, amended at the 31st Session of the Standing Committee of the 10th National People’s Congress on 29 December 2007, amended at the 21st Session of the Standing Committee of the 11th National People’s Congress on 30 June 2011 and amended at the 5th Session of the Standing Committee of the 13th National People’s Congress on 31 August 2018 and with effect as of 01 January 2019 (Individual Income Tax Law).

  555. 555.

    Liu (2014), p. 186.

  556. 556.

    Ibid, p. 186; Chen and Chen (2009), p. 34.

  557. 557.

    Liu (2014), pp. 186–187; Chen and Chen (2009), p. 34.

  558. 558.

    See exemplary the discussions in Ting and Ge (2014), pp. 675–676; Chen and Chen (2009), p. 34.

  559. 559.

    Art. 6 Tax Circular 159.

  560. 560.

    State Council (2018).

  561. 561.

    State Council (2018).

  562. 562.

    Art. 5 Tax Circular 159.

  563. 563.

    For a detailed discussion, see Ting and Ge (2014), p. 675.

  564. 564.

    Cao (2011), p. 17.

  565. 565.

    Yang (杨杰) and Qu (曲天明) (2010), pp. 65–66; Mahony (2015), p. 233; Yu et al. (2012b), p. 12.

  566. 566.

    Art. 11 FIPE Measures in conjunction with Art. 6 PEL.

  567. 567.

    Ting and Ge (2014), p. 672; Yu et al. (2012b), p. 12.

  568. 568.

    Liu (2014), p. 186.

  569. 569.

    Arts. 3–4 Enterprise Income Tax Law.

  570. 570.

    Liu (2014), p. 187.

  571. 571.

    Ibid, p. 187.

  572. 572.

    Art. 3 Para. 2 Enterprise Income Tax Law.

  573. 573.

    Arts. 4 and 27 Para. 5 Enterprise Income Tax Law in conjunction with Art. 91 of the PRC Law on Enterprise Income Tax Implementing Regulations (中华人民共和国企业所得税法实施条例), promulgated by the State Council on 6 December 2007, amended on 23 April 2019 with effect as of the same day (Enterprise Income Tax Law Implementing Regulations).

  574. 574.

    Art. 5 Para. 1 Enterprise Income Tax Law Implementing Regulations. A detailed discussion of the concept of Permanent Establishment goes beyond the scope of this book. See exemplary Qiu (2014), pp. 274–306.

  575. 575.

    Art. 5 Para. 2 Enterprise Income Tax Law Implementing Regulations.

  576. 576.

    Liu (2014), p. 187.

  577. 577.

    Meyer (2016), pp. 204–205.

  578. 578.

    Liu (2014), pp. 187–188.

  579. 579.

    Meyer (2016), p. 204; Ting and Ge (2014), p. 676; Liu (2014), p. 188.

  580. 580.

    Liu (2014), p. 190.

  581. 581.

    In respect to the German-Chinese Double Taxation Agreement, see Meyer (2016), pp. 203–222; 229–234.

  582. 582.

    Art. 1 Individual Income Tax Law.

  583. 583.

    Liu (2014), p. 188.

  584. 584.

    Art. 1 Enterprise Income Tax Law in conjunction with Art. 2 Enterprise Income Tax Law Implementing Regulations.

  585. 585.

    Ting and Ge (2014), p. 674; Liu (2014), p. 188.

  586. 586.

    Ting and Ge (2014), p. 674.

  587. 587.

    Qiu (2014), p. 301; Zhang (2011), p. 872; Wang and Yong (2010), p. 15.

  588. 588.

    Mahony (2015), p. 233.

  589. 589.

    Jiao and Kasteleijn (2011), p. 60.

  590. 590.

    Williams (2012), p. 11.

  591. 591.

    Yu et al. (2012a), p. 10.

  592. 592.

    Qiu (2014), p. 301.

  593. 593.

    Liu (2014), p. 185; Yang (杨杰) and Qu (曲天明) (2010), p. 66.

  594. 594.

    Shaddox (2013), pp. 473–474, 476.

  595. 595.

    Ibid, p. 477.

  596. 596.

    Meyer (2016), p. 213; Shen (2015), p. 56.

  597. 597.

    See Sect. 3.2.2.1.

  598. 598.

    See Sect. 4.1.2.

  599. 599.

    Arts. 30–35, 51–53 GPCL.

  600. 600.

    PRC General Rules of Civil Law (中华人民共和国民法总则), adopted at the 5th Session of the 12th National People’s Congress 15 on March 2017 and with effect as 1 October 2017.

  601. 601.

    Li (2018), pp. 17–50. At the time of writing of this book, the comprehensive Civil Code had not yet been promulgated by the NPC.

  602. 602.

    Bu (2017a), p. 185.

  603. 603.

    Li (李建国) (2017).

  604. 604.

    Ibid, item 3.5.

  605. 605.

    Ibid, item 3.5.

  606. 606.

    For an analysis of this new category, see Sect. 7.1.1.1.

  607. 607.

    German Civil Code (Bürgerliches Gestzbuch), adopted by the German Reichstag on 18 August 1896; last amended by the German Bundestag on 19 March 2020.

  608. 608.

    Carsten Schäfer, Gesellschaft, in: Schäfer (2017), pp. 16–17; Windbichler (2014), p. 137.

  609. 609.

    Wang (2017), p. 156.

  610. 610.

    Bu (2017a), p. 186; at time of writing of this book, the new Civil Code has not yet been promulgated by the NPC.

  611. 611.

    Binding and Zhang (2015), p. 53; Wang (2014), p. 62.

  612. 612.

    See the discussion in Sect. 4.1.9.1.

  613. 613.

    Yu (余文唐) (2017).

  614. 614.

    Ibid.

  615. 615.

    See Arts. 751–762 of the PRC Civil Code (Draft) ( 中华人民共和国民法典 (草案)), issued by the NPC in November and December 2019.

  616. 616.

    Art. 30 GPCL.

  617. 617.

    Art. 8 Para. 2 GPCL/ Art. 4 GRCL; Binding and Zhang (2015), p. 54; Yuantao et al. (1989), p. 62.

  618. 618.

    See Sects. 4.1.3.2 and 4.1.4.4.

  619. 619.

    Art. 31 GPCL. Regarding the relaxation of the statutory requirement of a partnership agreement in writing, see Sect. 4.1.9.2.

  620. 620.

    Art. 31 GPCL.

  621. 621.

    Art. 34 GPCL, allowing partners to elect a managing partner in Paragraph 2.

  622. 622.

    Art. 46 Opinion of the SPC on the Implementation of the GPCL.

  623. 623.

    For exceptions, see Article 50 Opinion of the SPC on the Implementation of the GPCL.

  624. 624.

    Ye (2002), p. 19.

  625. 625.

    Art. 32 Para. 2 GPCL.

  626. 626.

    Art. 35 GPCL.

  627. 627.

    Art. 35 Para. 2 GPCL.

  628. 628.

    Binding and Zhang (2015), p. 54.

  629. 629.

    Art. 38 PEL, see also Sect. 8.1.

  630. 630.

    Art. 33 GPCL.

  631. 631.

    Art. 45 Para. 1 Opinion of the SPC on the Implementation of the GPCL.

  632. 632.

    Art. 45 Para. 2 Opinion of the SPC on the Implementation of the GPCL.

  633. 633.

    Art. 52 GPCL.

  634. 634.

    Yuantao et al. (1989), p. 54.

  635. 635.

    Ibid, p. 54.

  636. 636.

    Epstein and Shen (2009), p. I-6.1.31; Yuantao et al. (1989), p. 54; Zheng (1986), p. 681.

  637. 637.

    Epstein and Shen (2009), p. I-6.1.31; Zheng (1986), p. 681. For a differing opinion, see Yuantao et al. (1989), p. 62.

  638. 638.

    Binding and Zhang (2015), p. 60.

  639. 639.

    Art. 51 GPCL.

  640. 640.

    Art. 52 GPCL.

  641. 641.

    Art. 52 GPCL.

  642. 642.

    Art. 53 GPCL.

  643. 643.

    Zheng (1986), p. 681.

  644. 644.

    Chen (2016), pp. 653–654.

  645. 645.

    Yuantao et al. (1989), pp. 60–61; Zheng (1986), p. 681.

  646. 646.

    Epstein and Shen (2009), p. I-6.1.31.

  647. 647.

    See Sect. 4.1.5.3.

  648. 648.

    Art. 2 Para. 2 PEL.

  649. 649.

    See the detailed analysis in Sects. 8.2.2.1 and 9.2.1.2.2.

  650. 650.

    Art. 26 Para. 1 PEL.

  651. 651.

    Art. 26 Para. 2 PEL.

  652. 652.

    See Sect. 4.1.9.3.

  653. 653.

    Art. 55 Para. 3 PEL.

  654. 654.

    Lin (2010), p. 260.

  655. 655.

    Art. 55 Para. 2 PEL.

  656. 656.

    Art. 55 Para. 1 PEL.

  657. 657.

    Art. 57 PEL.

  658. 658.

    Chen (2016), p. 657.

  659. 659.

    Art. 57 Para. 1 PEL.

  660. 660.

    Art. 57 Para. 2 PEL.

  661. 661.

    Lin (2010), p. 261.

  662. 662.

    Following the reform in 2013, partners can opt between a partial shielding and a full liability shield in connection to a professional liability insurance. See Article 8 German Partnership Enterprise Law.

  663. 663.

    Revised Uniform Partnership Act, promulgated by the National Conference of Commissioners on Uniform State Laws in 1997 as a replacement for the 1914 Uniform Partnership Act (UPA), later amended in 2011 and 2013.

  664. 664.

    Section 306 (c) RUPA.

  665. 665.

    Lin (2010), p. 261.

  666. 666.

    Ibid, p. 261.

  667. 667.

    Ibid, p. 261.

  668. 668.

    Ibid, pp. 261–262.

  669. 669.

    Art. 56 PEL.

  670. 670.

    See Sect. 4.1.4.3.

  671. 671.

    Art. 59 Para. 1 PEL.

  672. 672.

    Lin (2010), p. 262.

  673. 673.

    For law firms, the minimum amount of the professional liability insurance must be 2.5 million Euros per claim, and at least 10 million Euros per year. See Schäfer (2017), p. 647.

  674. 674.

    Measures for the Administration of Law Firms (律师事务所管理办法), promulgated by the Ministry of Justice on 18 July 2008, amended on 30 November 2012, amended on 6 September 2016, and amended on 5 December 2018 with effect as of 15 January 2019.

  675. 675.

    Art. 52 Para. 2 Law Firm Measures.

  676. 676.

    Art. 59 Para. 2 PEL.

  677. 677.

    Lin (2010), p. 263.

  678. 678.

    ibid, p. 260.

  679. 679.

    Art. 10 No 2 and 4 Law Firm Measures.

  680. 680.

    Lin (2010), p. 260.

  681. 681.

    Art. 9 No 2 and 4 Law Firm Measures.

  682. 682.

    Art. 26 Para. 1 in conjunction with Art. 29 Law Firm Measures.

  683. 683.

    Lin (2010), p. 264.

  684. 684.

    Arts. 60–84 PEL.

  685. 685.

    Art. 60 PEL.

  686. 686.

    Chen (2016), p. 658.

  687. 687.

    Art. 2 Para. 3 PEL.

  688. 688.

    Art. 61 PEL. Additionally, see Sect. 9.2.1.2.1.

  689. 689.

    Art. 67 PEL.

  690. 690.

    For a detailed analysis, and complete discussion of this structure, see Sect. 8.2.2.

  691. 691.

    For a detailed analysis, see Sect. 8.3.2.1.

  692. 692.

    Art. 64 PEL.

  693. 693.

    See Sect. 4.1.5.3.

  694. 694.

    Art. 11 FIPE Provisions.

  695. 695.

    Art. 2 Para. 1 FIPE Provisions. See also further analysis in Sect. 9.2.1.2.

  696. 696.

    Art. 11 FIPE Provisions.

  697. 697.

    Lin (2010), p. 259.

  698. 698.

    See Sect. 4.1.7.

  699. 699.

    Foreign investor are prohibited from investing in ‘Chinese legal matters’, according to Item 30 of the 2018 FDI Negative List in the Guidance Catalogue. Foreign law firms are only permitted to provide advice on ‘the impact of China’s legal environment’, and may only be organised in the form of a Representative Office. For a detailed overview, see Mahony (2015), pp. 164–173.

  700. 700.

    Liu (2014), p. 184; Ting and Ge (2014), p. 672.

  701. 701.

    For an in-depth analysis of the Specialised Partnership Enterprise, see Xia (夏凤英) and Dong (董书萍) (2011), pp. 125–128; Liu (刘新民) (2011), pp. 78–82.

  702. 702.

    Art. 2 FIPE Provisions.

  703. 703.

    Wang and Yong (2010), p. 16; Pissler (2010), p. 129.

  704. 704.

    See Sect. 3.2.3.2.

  705. 705.

    Zhang and Du (2014), p. II-5.1.8; Zhang (2011), pp. 875–876.

  706. 706.

    Implementation Measures on Pilot Program of Foreign-Invested Equity Investment Enterprises in Shanghai (本市开展外商投资股权投资企业试点工作的实施办法), jointly promulgated by the Shanghai Financial Services Office, Shanghai Municipal Commission of Commerce and Shanghai Administration for Industry and Commerce on 24 December 2010 with effect as of 24 January 2011.

  707. 707.

    Howson (2015), p. 399.

  708. 708.

    Circular on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises (完善外商投资企业外汇资本金支付结汇管理有关业务操作问题的通知), promulgated by the General Affairs Department of the State Administration of Foreign Exchange on 29 August 2008 and repealed with effect as of 1 June 2015.

  709. 709.

    For a detailed discussion, see Zhang (2011), pp. 881–882.

  710. 710.

    McGinty et al. (2017), p. 1.

  711. 711.

    Zhang (2011), p. 881.

  712. 712.

    Art. 3 Para. 2 SAFE Circular 142.

  713. 713.

    See Sect. 3.2.3.1.

  714. 714.

    McGinty and Jun (2015), p. 3; Zhang (2011), p. 881.

  715. 715.

    Art. 20 QFLP Shanghai Pilot Measures.

  716. 716.

    Zhang and Du (2014), p. II-5.1.3.

  717. 717.

    Art. 24 QFLP Shanghai Pilot Measures; Howson (2015), p. 399.

  718. 718.

    Howson (2015), pp. 399–400.

  719. 719.

    Ibid, p. 400.

  720. 720.

    Zhang and Du (2014), p. II-5.1.17.

  721. 721.

    For more details on the RQFLP, see Howson (2015), p. 400.

  722. 722.

    Zhang and Du (2014), p. II-5.1.16–17.

  723. 723.

    Circular on Reforming the Administrative Approach Regarding the Settlement of the Foreign Exchange Capitals of Foreign-Invested Enterprises (改革外商投资企业外汇资本金结汇管理方式的通知), promulgated by the State Administration of Foreign Exchange on 30 March 2015 and amended on 30 December 2019.

  724. 724.

    Art. 1 SAFE Circular 19.

  725. 725.

    Art. 4 SAFE Circular 19.

  726. 726.

    McGinty and Jun (2015), p. 3.

  727. 727.

    Ibid, p. 3.

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Kuntner, S. (2021). Partnership Enterprises as Sino-Foreign Alliances. In: China’s Foreign-Invested Limited Partnership Enterprise. China-EU Law Series, vol 7. Springer, Cham. https://doi.org/10.1007/978-3-030-54181-1_4

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