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[ESTABLISHING A BUSINESS ENTITY IN CHINA]
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structure choice as it offers more flexibility to the partners in the governance and operation thereof. a) General Partnership - Unlimited liability
Governance ◼ The shareholders’ general meeting is the highest organ of authority of a CLS. The articles of association of a CLS may provide for the proceedings and voting procedures of the shareholders’ general meeting except as otherwise mandated by law. ◼ Like an LLC, a CLS shall also
A general partnership shall have at least two partners, each bearing joint and several unlimited liability to the creditors of the general partnership.
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Capital
commitment
and
have a board of directors, a board of supervisors, a legal representative, and one or more managers that exercise powers and undertake obligations similar to those described in subsection a). The law provides for higher requirements regarding the day-to-day operation and management of a CLS. For example, the law provides for mandatory procedural requirements for the proceedings of the shareholders’ general meetings and the meetings of the board of directors that shall be followed by all CLSs.
contribution
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Upon the partnership shall register the aggregate capital commitment of all formation, partners, as well as the capital commitment of each partner. Any subsequent increase or reduction of the capital commitment of a partner requires an amendment of the partnership’s registration information. Except otherwise required by law, the partners may schedule their capital contributions in the partnership agreement. as
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3) Partnership
Partnerships in China do not differ much from partnerships in many other jurisdictions. A partnership may be established in the form of either a general partnership or a limited partnership. It does not have a legal personality and bears unlimited liabilities to its creditors. The partnership is nevertheless a popular
- Governance A general
partnership is governed by the partners’ meeting. The specifics of the partners’ meeting may be stipulated in the partnership agreement, including the
ILN Corporate Group – Establishing a Business Entity Series
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