Under the Partnership Enterprise Law of the People’s Republic of China, a limited partnership enterprise must be registered with the market supervision and administration authority and does not have independent legal person status. A limited partnership is composed of at least one general partner and one or more limited partners.
The general partner bears unlimited joint and several liability for the debts of the partnership with all of their personal assets. In contrast, limited partners are liable only to the extent of their respective capital contributions and do not assume personal liability beyond that amount.
The principal distinction between a limited partnership and a general partnership lies in the allocation of liability. A general partnership consists solely of general partners, all of whom bear unlimited joint and several liability for the partnership’s obligations. A limited partnership, however, allows for the participation of limited partners who enjoy limited liability.
In China, limited partnership enterprises are most commonly used in the private equity and investment fund sectors.
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