What Is a General Partnership?

A general partnership is made up of general partners, who assume unlimited joint and several liability for the debts of the partnership. Where the "Partnership Enterprise Law" has special provisions on the form of liability of general partners, such provisions shall prevail. Solely state-owned companies, state-owned enterprises, listed companies, and public welfare institutions and social organizations may not become general partners. ^[1]

General partnership

A general partnership is made up of general partners, who assume unlimited joint and several liability for the debts of the partnership. "

According to the newly amended Partnership Enterprise Law, in addition to the limited liability of limited partnerships, limited partners may also have limited liability for general partnerships under certain special circumstances.

Article 55 provides that a professional service agency that provides paid services to customers with professional knowledge and expertise may be established as a special general partnership law.

1. Composed of general partners. The so-called general partners refer to natural persons, legal persons and other organizations that have unlimited joint and several liability for the debts of the partnership in accordance with law in the partnership.

Conditions for the establishment of a general partnership

1. There are more than two partners.

Partners can be natural persons, legal persons and other organizations. If the partner is a natural person, he should have

General partnership business execution:

(1) Each partner, regardless of his or her capital contribution, has the right to enjoy the right to execute partnership business affairs on an equal basis.

(2) If one or more partners are entrusted to perform the partnership affairs, the partner who executes the partnership affairs shall represent the partnership enterprise to the outside; other partners no longer perform the partnership affairs, and the partners who do not perform the partnership affairs shall have the right to supervise the execution of the partnership affairs. Situation of partnership affairs.

(3) Where one or more partners perform partnership affairs, the partners who execute the affairs shall report to other partners regularly the implementation of the affairs and the operating and financial status of the partnership enterprise, and the profits generated from the execution of the partnership office shall belong to the partnership enterprise The expenses and losses incurred shall be borne by the partnership.

(4) Partners have the right to consult financial information such as the accounting books of the partnership.

(5) Where partners execute partnership affairs separately, the executive partners may raise objections to the affairs performed by other partners. When an objection is raised, the execution of the matter shall be suspended. In the event of a dispute, the voting method stipulated in the partnership agreement shall be followed. If the partnership agreement is not stipulated or the agreement is not clear, the voting method of one partner and one vote shall be adopted by more than half of all partners.

(6) If the partner entrusted to perform the partnership affairs does not perform the affairs in accordance with the partnership agreement or the decision of all partners, other partners may decide to revoke the entrustment.

Legal liability of general partnerships:

The Partnership Enterprise Law stipulates that: In a special general partnership enterprise, if a partner or several partners cause debts of the partnership enterprise due to intentional or gross negligence in the practice activities, they shall bear unlimited liability or joint and several liability, while other partners only Liability is limited to its share of property in the partnership. This is different from general partnerships. In general partnerships, even if partners cause debts to the partnership based on intentional or gross negligence, all partners still bear unlimited joint and several liabilities for external liability, although Other partners within the group can pursue faulty partners, and in special general partnerships, when there is a partnership debt caused by the intentional or gross negligence of individual partners, other partners without fault are not required to bear In the case of external responsibility, creditors can only recourse to partners who are at fault. Of course, if the partners of a special general partnership do not cause debts of the partnership due to intentional or gross negligence, in this case, as with a general partnership, all partners should bear unlimited joint and several liabilities. In terms of commitment to external responsibilities, all partners still bear unlimited joint and several liability, and only the faulty partners can be pursued.

When a partner of a special general partnership causes debts of the partnership due to intentional or gross negligence, the property of the partnership is first used to pay the external settlement liability. If there is insufficient, the faulty partner shall assume unlimited liability or joint and several liability without fault Partners are no longer liable. When the property of the partnership is used to bear external liabilities, the faulty partner shall be liable for the losses caused to the partnership in accordance with the partnership agreement.

Conditions of withdrawal from the general partnership:

1. Withdrawal of agreement

Partnership agreement sets out the duration of the partnership

(1) The reason for withdrawal from the partnership agreement appears;

(2) with the unanimous consent of all partners;

(3) Reasons why it is difficult for the partners to continue to participate in the partnership;

(4) Other partners have seriously breached their obligations under the partnership agreement.

2. Notification of withdrawal

(1) The partnership agreement does not stipulate the duration of the partnership;

(2) The withdrawal of the partner does not adversely affect the execution of the partnership business;

(3) Other partners should be notified 30 days in advance.

3. Of course retire

(1) The death of a natural person or being declared dead according to law;

(2) an individual's insolvency;

(3) The legal person or other organization has its business license revoked, ordered to be closed, cancelled, or declared bankrupt;

(4) must have relevant qualifications and lose that qualification;

(5) The partner's entire property share in the partnership is enforced.

4. Delisting

Consent by other partners

(1) Failure to perform the capital contribution obligations;

(2) Cause losses to the partnership due to intentional or gross negligence;

(3) improper conduct in the execution of partnership affairs;

(4) The reasons stipulated in the partnership agreement occurred.