1. Advantages and Disadvantages of Partnerships and Limited Companies Nowadays, raising venture capital funds through limited partnerships has become the main method of overseas venture capital. Judging from the practical experience in the industry, companies in the industry will mainly use the method of establishing limited partnerships in the future.

method to raise RMB funds.

Why has raising venture capital funds through limited partnerships become the main method of overseas venture capital? The reason is that limited partnerships have the following three major advantages: First, limited partnerships comply with international practices.

Limited partnership is the main form of venture capital companies in mature capital markets such as the United States; second, it enjoys tax benefits.

In accordance with the relevant national taxation and the "Partnership Law" provisions of the partnership's production and operation income and other income, limited partnerships do not pay income tax, but the partners pay income tax respectively.

An important reason why my country's venture capital companies choose limited partnerships rather than corporate forms is the tax benefits. The partners pay the taxes themselves to avoid double taxation; third, the distribution mechanism is flexible.

The income or profit distribution of a limited partnership is completely freely agreed upon between the partners and is not subject to restrictions on capital contribution ratios.

2. The difference between a partnership and a company To understand the regulations on dividends, you need to determine the type of business you have.

The differences between a partnership and a company are as follows: 1. A partnership is a contractual enterprise, and a limited company is an equity enterprise.

my country's "Partnership Law" stipulates that a partnership is an enterprise in which all partners enter into a partnership agreement in accordance with the law, jointly contribute capital, operate in partnership, share profits, bear risks, and bear unlimited joint and several liability.

The partnership agreement is the basis for the partners to enjoy rights and assume obligations. The method, amount and period of capital contribution of the partners, the method for the partners to distribute profits and losses, and the execution, dissolution and liquidation of the partnership enterprise are all in accordance with the partnership agreement concluded in accordance with the law.

protocol to operate.

The "Company Law" stipulates that shareholders of a limited company contribute capital in proportion to their capital contribution, bear responsibility for the company to the extent of their capital contribution, and enjoy the owner's rights to benefit from assets, make major decisions, and select managers based on the amount of capital invested in the company.

2. A partnership does not have legal personality, while a limited company does. This is the main difference between a partnership and a company.

This difference has two meanings. First, it shows that a partnership only has a relatively independent personality, while a limited company has an absolutely independent personality.

The second explanation is that the property of a partnership only has relative independence, while the property of a limited company has absolute independence.

A partnership is formed by each independent partner according to a partnership agreement and has the nature of a partnership.

A partnership only has a relatively independent personality. It conducts business activities as an independent entity. It can own property, participate in litigation, and enjoy various other rights in its own name. However, in terms of assuming debt liability, the partners and the partnership have joint and several rights.

relation.

Partners bear unlimited joint and several liability for the debts of the enterprise. Each partner can enjoy rights and assume obligations on behalf of other partners. Even if they have an internal agreement on the proportion of debt liability, they cannot resist external unlimited joint and several liability.

3. The difference in liability between a partnership and a limited company is closely related to the difference in their property rights structure.

The property rights structure of a partnership is a unitary structure, while that of a company is a dual structure.

The property of a partnership is not owned independently by the partnership, but by the partners. Therefore, the partners and the partnership are jointly and severally liable.

3. The tax difference between a limited liability company and a limited partnership: a limited liability company pays corporate income tax, and a partnership pays personal income tax.

Both types of enterprises need to pay value-added tax; after a limited liability company pays corporate income tax, it also needs to pay personal income tax on year-end profit dividends.

The main difference in tax policies between a partnership and a limited company is that the legal basis for collecting income tax is different.

The income tax paid by a partnership is levied in accordance with the Personal Income Tax Law, and the applicable tax rate is the five-level excess progressive tax rate of 5%-35%. The income tax paid by a limited company is levied in accordance with the Enterprise Income Tax Law, with a tax rate of 25%.

The above is the relevant content introduced to you about the advantages and disadvantages of partnerships and limited companies. The differences between limited companies and partnerships are very obvious, which are specifically reflected in the form of liability, capital contribution method, registered capital requirements, and execution of affairs.