The company system requires that the same shares have the same rights and the same shares have the same voting rights. The PE industry requires that the investment decision-making power and the operation and management power of investment projects be concentrated in the general partner-the manager (or company) of PE. Although limited partners provide 98% of the fund's capital, they cannot directly interfere with PE's major investment decisions and the operation and management of investment projects. ◎ The company system requires that the same shares have the same profit and the same shares enjoy the same income distribution right. In order to encourage fund managers, PE industry usually gives the fund manager 15%-25% of the investment excess profit share according to industry practice, and only requires the manager (or company) to invest 1%-2% of the fund share. ◎ The company system assumes that the company can "continue to operate", and the characteristic of PE industry is that each fund has a duration (about 10 years) when it is launched. ◎ The company has regulations on the registered capital and the payment period, and the registered capital must be paid in full within a period of time after the establishment of the company. The PE industry adopts the "committed capital contribution" system, that is, only after the investment of a certain project is confirmed, the fund manager will inform all limited partners to subscribe for the fund share and total investment of the project as promised, calculate and deliver the funds, and the fund manager will invest after receiving the money. Every investment project is operated in this way until the scale of funds is exhausted or the funds expire. Before the investment project is determined, PE does not retain capital. Any capital has a cost (such as opportunity cost), and PE's "commitment investment system" minimizes the cost of capital. ◎ Sometimes, the Company Law has strict restrictions on the amount and object of investment for the company's foreign investment or reinvestment. The characteristic of PE industry is to use its own funds (about 1/3) and loan funds (about 2/3) for portfolio investment, and use financial leverage to improve the return on investment. For the restrictions on investment objects, investment amount and investment policies, PE prefers to determine them by agreement or articles of association rather than by law. ◎ The partners of enterprise PE have to pay income tax on company income and personal income, while the partner system avoids the repeated payment of income tax by partners. Partnership system provides PE partners with a channel of "financial infiltration". Limited partnership enterprise management. The management right belongs to the general partner. (1) management characteristics of general limited partnership According to the provisions of the Partnership Enterprise Law, the biggest feature of limited partnership management is that the general partner carries out the partnership affairs, and the limited partner does not carry out the partnership affairs, which does not represent the partnership enterprise externally. There are two reasons: on the one hand, the general partner bears unlimited joint liability, and the limited partner bears limited liability to the extent of capital contribution; On the other hand, general partners are generally promoters with management experience, and limited partners are generally well-funded participants. (II) Management Characteristics of Limited Partnership PE The characteristic of limited partnership private equity fund is to maximize the professional division of labor and effective allocation of resources, which is embodied in the following aspects: the general partner gives full play to his professional and experience advantages in the field of private equity investment, and the limited partner gives full play to his capital advantages to realize the effective combination of capital and specialty, which is the biggest feature of the governance structure of limited partnership private equity fund. The core of the governance structure of limited partnership private equity fund is to realize the reasonable distribution and checks and balances of the management rights of partnership enterprises by general partners and limited partners. A good governance structure will establish an effective incentive and restraint mechanism for professional investment talents, and then improve the operational efficiency of enterprises. As a professional investor in a partnership, the general partner needs to bear unlimited responsibilities while managing the partnership, which makes the general partner form values and interests consistent with investors under the policy of "carrots and sticks". Two. Internal Management-Partners' Meeting (I) International Practice In the internal governance structure of limited partnership private equity funds, western developed countries generally set up investment committees, advisory committees and partners' meetings. Investment committees are generally composed of general partners (sometimes including limited partners and personnel from third-party institutions), and the specific personnel are appointed or appointed by the general partners. Their duty is to make the final decision on the major affairs of the partnership, give opinions to the general partners on supporting or rejecting the purchase, deployment or adjustment related to the proposed investment projects, and give opinions on the loan and guarantee terms of the fund. The investment decision-making power of the fund is still in the hands of the board of directors composed of general partners. Meetings of the Investment Committee generally need to be convened by the general partner. All meetings of the Investment Committee can be held in person by members, or by telephone conference or other means. Each member of the Investment Committee has one vote, and any resolution of the Investment Committee must ensure that there is no more than one negative vote in the valid voting. In practice, the Investment Committee will adopt different voting systems for initial investment, follow-up investment projects and withdrawal projects: for initial investment and follow-up investment projects, a specific majority, that is, more than 2/3 members, is required to pass; Only a general majority is required to quit the project, that is, 1/2 members or more. Advisory committees are generally composed of limited partners, and sometimes some members who are elected by general partners and have nothing to do with any limited partners, general partners, management companies or investment consultants are equivalent to independent members. The duty of the Advisory Committee is to make decisions on related party transactions, conflicts of interest or over-quota foreign investment, and make suggestions to the general partners on major issues in fund management and implementation. The general partner and any limited partner may request that a matter be submitted to the advisory committee for review. The Advisory Committee generally meets at least twice a year, which can be held by telephone conference or video conference. The partners' meeting is composed of all partners, whose duty is to make decisions on matters such as withdrawal of partners, admission of core partners, identity conversion of general partners, transfer of rights and interests, liquidation, etc. (B) China's "Localization" Practice There are obvious differences between China's local limited partnership private equity funds and international practices in internal governance structure. In practice, limited partners in China rarely strictly abide by the rule of "not participating in limited partnership affairs". In most cases, the limited partner has the right to decide the investment decision of the limited partnership, and even has a veto power over major investment decisions. Therefore, China has not fully implemented the limited partnership system, and there is a certain gap with the limited partnership system stipulated by law, which is determined by China's special national conditions. In China, it is difficult for a general partner to reassure a limited partner in terms of professionalism and experience. In addition, the initial establishment of limited partnership and the imperfection of supporting systems in various aspects have led to the strong "China characteristics" of China's limited partnership private equity funds.