What does partnership mean?

Partnership refers to a for-profit organization in which all partners enter into a partnership agreement, * * * jointly contribute capital, * * * jointly operate, * * * enjoy benefits, * * * bear risks, and bear unlimited joint and several liabilities for corporate debts. Partnership enterprises are divided into general partnership enterprises and limited partnership enterprises. A partnership enterprise refers to an enterprise organization form in which natural persons, legal persons and other organizations are established in China according to law, two or more natural persons enter into a partnership agreement, * * * jointly contribute to the operation, * * * assume sole responsibility for profits and losses, and * * * bear risks. Generally speaking, a partnership enterprise cannot obtain the qualification of a person and does not pay enterprise income tax, but pays personal income tax. There are general partnerships and limited partnerships. Among them, general partnership also includes special general partnership. Wholly state-owned companies, state-owned enterprises, listed companies, public welfare institutions and social organizations may not become general partners. A partnership enterprise may be operated by some partners, while other partners only contribute capital and bear profits and losses, or it may be jointly operated by all partners.

Partnership enterprises have the following characteristics:

1. The partnership is established on the legal basis of the partnership agreement. The partnership agreement is the basic legal basis for adjusting the partnership relationship, regulating the mutual rights and obligations of partners, and handling partnership disputes. It is binding on all partners and is the legal basis for the establishment of a partnership enterprise.

2. A partnership enterprise shall be jointly funded by all partners and operated in partnership. Capital contribution is the basic obligation of a partner, and it is also a prerequisite for his qualification as a partner. Partners must participate in business activities in the form of partnership and engage in business activities with economic benefits;

3. Partners * * * bear the profits and losses, * * * bear the risks and bear unlimited joint liability. Partners may share the profits of the partnership in proportion to their capital contribution to the partnership, and may also distribute the profits of the partnership in other ways agreed by the partners. When the partnership property is not enough to pay off the partnership debt, the partners need to pay off the debt with other personal property, that is, bear unlimited liability, and any partner has the obligation to pay off all the partnership debts, that is, bear joint liability.

To sum up, a partnership enterprise is a form of enterprise organization established in China by natural persons, legal persons and other organizations in accordance with Chinese laws, in which two or more natural persons enter into a partnership agreement, * * * jointly contribute to the operation, * * * assume sole responsibility for profits and losses, and * * * bear risks. Partnership enterprises generally have no legal person status and do not pay enterprise income tax, but they need to pay personal income tax.

Legal basis:

Article 14 of the Partnership Enterprise Law of People's Republic of China (PRC)

The establishment of a partnership enterprise shall meet the following conditions:

(1) There are more than two partners. Partners who are natural persons shall have full capacity for civil conduct;

(2) Having a written partnership agreement;

(3) The amount of capital contribution subscribed or paid by the partners;

(4) Having the name of the partnership enterprise and the place of production and business operation;

(5) Other conditions stipulated by laws and administrative regulations.