Many funds seem to have little difference, but they are actually a subdivision of a large branch or different operating mechanisms. Understanding the differences between funds can make better investments. What's the difference between a contractual fund and a limited partnership?

The difference between contractual fund and limited partnership

1, with different legal basis.

Contractual funds are established according to fund contracts, and trust law is the basis for the establishment of contractual funds; The company fund is established according to the Company Law.

2. Different legal person qualifications

Contract funds do not have legal person status, while corporate funds themselves are joint-stock companies with legal person status.

3. The status of investors is different.

As the beneficiary of trust deed's regulations, investors of contract funds usually have no say in the important investment decisions made by how to use the funds; Investors of company funds, as shareholders of the company, have the right to examine and approve major decisions of the company and express their opinions.

4. Different financing channels.

The company fund has the legal person status. When the funds are properly used, the business is carried out smoothly, and the company needs to expand its scale and increase its assets, it can borrow money from the bank: contract funds generally do not lend money to banks because they do not have legal person status.

5. The basis of operation attributes is different.

Contractual funds operate fund property by virtue of fund contracts; The company's funds are operated in accordance with the articles of association.

6. Different fund operations.

Corporate funds, like ordinary joint-stock companies, are generally permanent unless they reach the bankruptcy liquidation stage stipulated in the Company Law; The contractual fund is established and operated according to the fund contract. When the contract expires, the fund operation is terminated.