Legal basis: Provisional Regulations on Private Enterprises in People's Republic of China (PRC).
Article 6 Private enterprises are divided into the following three types:
(1) A wholly-owned enterprise;
(2) Partnership enterprises;
(3) Limited liability companies.
Article 7 A wholly-owned enterprise refers to an enterprise invested and operated by one person.
The investors of a sole proprietorship enterprise shall bear unlimited liability for the debts of the enterprise.