Compared with public funds, private funds usually adopt a partnership fund system, while public funds usually adopt the form of corporate funds. What is the difference between corporate funds and partnership funds?
1. Legal entity Corporate funds exist as independent corporate legal persons, while partnership funds do not have independent corporate legal persons. The partnership fund appoints at least one manager to assume the corresponding legal entity functions.
2. Mode of operation: Corporate fund managers can be shareholders or external hires, and are essentially a company.
Major matters of the fund are subject to the decision-making process of the board of directors or shareholders' meeting stipulated in the articles of association.
As a shareholder, investors enjoy all the rights and obligations conferred by the company law such as participation in management and expected income distribution. They have limited liability for the company's debts to the extent of their capital contribution.
3. Tax management Corporate funds pay corporate income tax in the manner of a limited liability company, and personal income tax on the expected income distributed to investors; partnership funds, since they are not independent legal entities, only need to pay personal income tax when the expected income is distributed.
Income Tax.
4. Legal Liability Corporate funds bear corresponding limited liability in proportion to the capital contribution of all shareholders; partnership funds designate at least one partnership fund manager to bear unlimited liability in accordance with the partnership agreement.
5. Investment method: Corporate funds can invest in intangible assets such as labor services and knowledge products after evaluation; partners of partnership funds can only invest in cash.
For corporate funds and partnership funds, each has its own advantages and disadvantages in terms of operation. The specific choice must be based on reality.
Warm reminder: Financial management is risky, so investment needs to be cautious.