What are the reasons for choosing the legal form of a partnership?

1) Investors' Responsibilities.

If a limited liability company bears limited liability externally, it will not allow shareholders to pay off their debts with other assets; However, in the case of a private enterprise with unlimited liability, such as a sole proprietorship or a private partnership, not only will the personal assets be used to pay off the debt, but the partners will also have unlimited joint and several liability.

2) The conditions, procedures and fees for establishment.

For example, relatively speaking, the establishment conditions of sole proprietorship enterprises and partnership enterprises are relatively relaxed, the establishment procedures are relatively simple, and the costs are low; However, the shareholding **** requires strict establishment conditions, complex establishment procedures and high establishment fees.

3) Taxation of enterprises.

For example, sole proprietorships and partnerships do not have to pay corporate income tax, but their owners and partners must pay individual income tax on their income from the distribution of corporate surpluses. The limited liability company shall pay corporate income tax on its operating income, and when the company's shareholders obtain the distribution of after-tax profits from the company, they shall also pay income tax on the distribution of the company.

4) Investors' expectations of the life cycle of the business.

For example, a limited liability company and a share can exist indefinitely and perpetually, without being affected by the life and death of its shareholders. Partnerships and sole proprietorships are deeply affected by the individual circumstances of the partners and business owners, and the choice of partners is also very important, and may be dissolved at any time due to the death or bankruptcy of individual partners.

5) The rights of the members of the enterprise and the procedures for controlling the enterprise.

In sole proprietorship and partnership, the investor has absolute control over the enterprise; The shareholders of the limited liability company and the shares do not have absolute control over their own capital contributions and the company's property.

The main reason for choosing a partnership is that there is no corporate income tax for the partnership, and only one individual income tax is required.

Legal analysis: Helu Dagang enterprises have the following characteristics: (1) The partnership is established on the legal basis of a partnership agreement.

2) The partnership shall be jointly funded by all partners and operated in partnership. (3) The partners are jointly responsible for profits and losses, need to share risks, and bear unlimited joint and several liabilities to the outside world.

Legal basis: Article 14 of the Partnership Enterprise Law of the People's Republic of China The following conditions shall be met for the establishment of a partnership enterprise: (1) There are more than two partners.

If the partner is a natural person, he or she shall have full capacity for civil conduct; (2) Have a written partnership agreement; (3) Capital contributions subscribed or actually paid by partners; (4) Have the name of the partnership and the place of production and operation; (5) Other conditions provided for by laws and administrative regulations.

A legal subject is a person who is active in the law, has rights, obligations and responsibilities. If the partnership is insolvent, the shareholders need to bear joint and several liability, so the partnership is not a legal entity, but an accounting entity.

Paragraph 2 of Article 32 of the General Principles of the Civil Law states that "all partners shall bear civil liability for the business activities of the person in charge of the partnership and other personnel." However, a legal person independently bears civil liability in accordance with the law, so a partnership is not a legal person.

1) The partnership has relatively independent property. During the existence of the partnership, the capital contribution of the partners and all the income obtained in the name of the partnership are the property of the partnership, the partnership enterprise may own and dispose of the property in its own name, the property of the partnership shall be jointly managed and used by all the partners in accordance with the law, and a single partner cannot dispose of his capital contribution in the partnership in the same way as he disposes of his own property, and before the dissolution of the partnership, the partners shall not request the division of the partnership property.

2) The partnership enterprise has a relatively independent capacity for civil liability. The debts of the partnership should first be paid off with the property of the partnership, and if the property of the partnership is sufficient to pay off its debts, the partners will not be held personally liable. Only when the partnership's assets are insufficient to pay off its debts as they fall due, the partners are jointly and severally liable for it.

The debts of the partners to the partnership are in effect a kind of guarantee-like liability. When neither the property owned by the partnership nor the partners is sufficient to pay off their debts, the principle of "double priority" is implemented, that is, the property of the partnership enterprise has priority to pay off the debts of the partnership, and the property of the partners has priority to pay off the debts of the partners.

3) A partnership may carry out civil juristic acts and conduct civil litigation in its own name. A partnership enterprise may have its own name, and can independently carry out civil juristic acts in its own name, and have civil legal relations with external parties, and the partners can only be binding on the partnership if they carry out legal acts in the name of the partnership, otherwise they can only be personally responsible for the partnership. According to China's Civil Procedure Law and relevant judicial interpretations, a partnership enterprise may participate in civil litigation in its own name as "other organizations" and have independent litigation capacity.

Partnership. A partnership is a for-profit organization in which the partners enter into a partnership agreement, jointly contribute, operate in partnership, share benefits, share risks, and bear unlimited joint and several liability for the debts of the partnership.

A partnership has the following characteristics:

1) The partnership agreement is the basis for the formation of a partnership. The partners are equal to each other, and the profits and losses of the partnership are distributed and shared by the partners in accordance with the proportions agreed in the partnership agreement. If the partnership agreement does not stipulate the proportion of profit distribution and loss sharing, it shall be equally distributed and shared by each partner.

2) The partnership does not have legal personality.

3) The partners of the partnership are jointly and severally liable for the debts of the enterprise. The so-called unlimited joint and several liability means that when the property of the partnership enterprise is insufficient to pay off the debts of the enterprise, the partners shall pay off the debts with their personal or even family assets, and the creditor may demand full repayment from any partner for the part of the debts that the assets of the partnership enterprise are insufficient to pay off.

1. The legal form of a limited liability company is particularly old.

A limited liability company refers to an enterprise legal person established in accordance with the law, with independent legal person property, and with limited liability for its debts with all its property, for the purpose of profit.

A limited liability company has the following characteristics:

1) The company must be established in accordance with the law, and must be established in accordance with the establishment conditions and establishment procedures stipulated in the Company Law to obtain legal personality.

2) The company has the status of a legal person, and the company's property is independent of the shareholders' personal property; Corporate liability is independent of individual shareholder liability. The company is liable for the company's debts with all its property, and the shareholders are liable to the company to the extent of their subscribed capital contributions or subscribed shares.

3) The company is for profit, and the ultimate purpose of the company is to obtain benefits and distribute the profits to shareholders.

2. Characteristics of the legal form of sole proprietorship enterprises.

Sole proprietorship.

A sole proprietorship refers to a business entity invested by a natural person, whose property is owned by the investor, and whose personal property bears unlimited liability for the debts of the enterprise.

A sole proprietorship has the following characteristics:

1) The investor of a sole proprietorship is a natural person.

2) The property of the sole proprietorship is owned by the investor. The assets of the enterprise include not only the initial assets invested by the investors at the time of the establishment of the enterprise, but also the assets accumulated during the existence of the enterprise. The investor is the sole legal owner of the property of the Rising Sole Proprietorship.

3) A sole proprietorship does not have the status of a legal person, and the investor bears unlimited liability for the debts of the enterprise with its personal property. This is an important feature of a sole proprietorship. In other words, when the capital contribution declared and registered by the investor is insufficient to pay off the debts incurred by the sole proprietorship enterprise, the investor must use his personal property or even family property to pay off the debts.

A partnership is not a legal person. A legal person is an organization that has the capacity for civil rights and civil conduct, and independently enjoys civil rights and bears civil obligations in accordance with the law. A partnership refers to a for-profit organization in which each partner enters into a partnership agreement, jointly contributes capital, operates together, shares benefits, shares risks, and bears unlimited joint and several liability for corporate debts.

A legal person can bear civil liability independently, while a partnership as a whole has unlimited liability to creditors.

Article 102 of the Civil Code of the People's Republic of China: Unincorporated organizations are organizations that do not have the status of a legal person, but are able to engage in civil activities in their own name in accordance with law. Unincorporated organizations include sole proprietorships, partnerships, and professional service organizations that do not have legal personality. Article 103 of the Civil Code of the People's Republic of China: Unincorporated organizations shall be registered in accordance with the provisions of law.

Where laws and administrative regulations provide that the establishment of an unincorporated organization must be approved by the relevant stalking organs, follow those provisions. Article 57 of the Civil Code of the People's Republic of China provides that a legal person is an organization that has the capacity for civil rights and civil conduct, and independently enjoys civil rights and bears civil obligations in accordance with law.