With the development of China's securities market.

Private wealth increased rapidly.

The demand for private equity funds continues to expand.

However, "private equity funds" remain hidden underground due to the lack of clear legal definition and protection.

Escape from regulators.

It has become a potential source of crisis and instability in the securities market.

Our country has never clarified the legal status of private equity funds.

There is no corresponding regulatory system in place.

This hinders the orderly development of private equity funds.

The Partnership Enterprise Law, which was formally revised on August 27, 2006 and came into effect on June 1, 2007, specifically added limited partnership provisions and allowed legal person partnerships.

This creates a new channel for venture capital and private equity investment.

On the basis of one person bearing unlimited liability, more persons bear limited liability.

to solve the problem of fund raising.

Compared with these types of funds currently on the Chinese market, private equity funds operated as partnerships are similar to corporate funds, but they overcome the shortcomings of corporate funds.

A limited partnership is a partnership consisting of two types of partners: general partners and limited partners.

The general partners bear unlimited joint and several liability for the partnership, while the limited partners bear limited liability for the partnership within the scope of their own capital contributions.

A partnership is not taxed as an economic entity and its net income is paid directly to investors.

Investors pay their own taxes as income.

my country's new "Partnership Law" stipulates the institutional arrangements for general partners and limited partners and the division of legal responsibilities of different types of partners, which are very suitable for the development of private equity funds.

Investors, as limited partners, only bear investment risks within the limit of their own investment amount.

The fund manager is authorized to manage the partnership's assets.

Has unlimited liability as a general partner and.

The new "Partnership Enterprise Law" clearly stipulates that the partners shall pay income tax separately on the production and operation income and other income of the partnership enterprise. There is no problem of repeated tax payment, so that individual investors of my country's private equity funds can legally enjoy the tax-free benefits of stock investment income. , in line with the interests of private equity fund investors.

Although the new partnership law has laid the foundation for the development of private equity funds institutionally, under the current framework, there are still several shortcomings: 1. The first problem faced by limited partnership private equity funds is account opening.

According to Article 166 of the Securities Law: Investors who entrust a securities company to conduct securities transactions must apply to open a securities account.

Securities registration and clearing institutions shall open securities accounts for investors in their own names in accordance with regulations.

Investors apply to open an account.

Must hold legal documents proving Chinese citizenship or Chinese legal person status.

Except as otherwise provided by the state.

That is, only citizens and legal persons of the People's Republic of China are allowed to open securities accounts.

The newly revised Partnership Law does not clarify the legal person status of a partnership. Therefore, according to the law, private equity funds established in the form of limited partnerships cannot open securities accounts unless otherwise stipulated by the state.

2. After the revision of the new Partnership Enterprise Law.

Whether it is possible to establish a private equity fund in the form of a limited partnership in China.

Still no clear provisions have been made.

Our country's policy in the field of financial securities is basically that it can only be allowed if there are clear provisions in the law.

Therefore, before special private equity fund legislation or more detailed related regulatory measures are introduced.

The operating form of private equity funds is operated as a limited partnership.

After the new partnership law is implemented, you may fall into the dilemma of "only hearing the sound of the stairs but no one coming down".

3. According to the newly revised Partnership Law, a limited partnership consists of general partners and limited partners.

The general partners bear unlimited joint and several liability for the debts of the partnership, and the limited partners bear liability for the debts of the partnership to the extent of their subscribed capital contributions. Partners of a partnership can include natural persons, legal persons and other organizations.

Obviously, while this kind of organizational setup provides new options for the standardized operation of private equity funds, it also virtually increases the moral hazard of managers who are specifically responsible for the operation of invested funds. It is easy to induce financial risks when some special circumstances arise, and make these private equity funds

Funds are in a state of uncertainty for a long time.