A limited partnership enterprise shall be established by two or more and fifty or less partners; However, unless otherwise provided by law.

A limited partnership enterprise shall have at least one general partner.

A limited partner may contribute capital in cash, in kind, intellectual property rights, land use rights or other property rights at a fixed price.

A limited partner may not contribute capital with labor services.

In a limited partnership, the general partner carries out the partnership affairs. The executive partner may require that the remuneration and the method of remuneration extraction for executive affairs be stipulated in the partnership agreement.

A limited partner shall not represent the limited partnership enterprise externally without performing partnership affairs.

Second, the core mechanism of limited partnership private investment fund:

The first is the restriction on the scope and mode of investment: in practice, the way of "negative constraint" is often adopted to achieve the purpose of controlling investment risks. For example, it is agreed that the investment in a project shall not exceed 20% of the total subscribed capital contribution, and the bank loan of the partnership enterprise shall not exceed 40% of the total subscribed capital contribution.

Secondly, regarding the control of management fees and operating costs: in practice, there are usually two ways: management fees include operating costs or management fees are allocated separately, which can be agreed according to the actual situation of limited partnerships.

Thirdly, about profit distribution and incentive mechanism: In domestic practice, some private equity investment funds often adopt "priority recovery mechanism" and "callback mechanism" to ensure that the general partner can enjoy profit distribution after the limited partner recovers the investment, so as to ensure that the interests of the general partner and the limited partner are consistent.

Fourth, restrictions on the ways of joining and withdrawing limited partners and the amount of transferred funds: after the establishment of a limited partnership private equity fund, new limited partners can still be allowed to join, but some restrictions will be set, for example, limiting new limited partners to qualified institutional investors and corresponding capital requirements.

Fifthly, regarding the entrusted management mechanism, there are some obstacles for foreign investors to directly set up private equity funds as general partners because China has not yet liberalized foreign investors to participate in the establishment of partnership enterprises and is restricted by foreign exchange control on capital projects. Therefore, it is a flexible solution for foreign capital to participate in the establishment of fund management companies and obtain the profits of general partners through monopoly trade arrangements.