**Partnership Enterprise Law of the People's Republic of China**

Promulgation date: 08-27-2006

Effective date: 06-01-2007

Department: STANDING COMMITTEE OF THE NATIONAL PEOPLE\'S CONGRESS

Subject: OTHER PROVISIONS

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Order of the President of the People\'s Republic of China

(No. 55)

The Partnership Enterprise Law of the People\'s Republic of China was
amended and adopted at the 23rd session of the Standing Committee of the
10th National People\'s Congress of the People\'s Republic of China on
August 27, 2006. The amended Partnership Enterprise Law of the People\'s
Republic of China is hereby promulgated and shall come into force as of
June 1, 2007.

President of the People\'s Republic of China Hu Jintao

August 27, 2006.

Partnership Enterprise Law of the People\'s Republic of China

(Adopted at the 24th session of the Standing Committee of the 8th
National People\'s Congress on February 23, 1997 and amended at the 23rd
session of the Standing Committee of the 10th National People\'s
Congress of the People\'s Republic of China on August 27, 2006)

Contents

Chapter I General Provisions

Chapter II General Partnership Enterprises

Section 1 Establishment of A Partnership Enterprise

Section 2 Property of A Partnership Enterprise

Section 3 Execution of Partnership Affairs

Section 4 Relationship Between A Partnership Enterprise and Third
Persons

Section 5 Admission to and Withdrawal from A Partnership

Section 6 Special General Partnership Enterprises

Chapter III Limited Liability Partnership Enterprises

Chapter IV Dissolution and Liquidation of Partnership Enterprises

Chapter V Legal Liabilities

Chapter VI Supplementary Provisions

Chapter I General Provisions

Article 1 This law is formulated for the purpose of regulating the acts
of partnership enterprises, protecting the legitimate rights and
interests of partnership enterprises as well as their partners and
creditors, maintaining the social and economic order, and promoting the
development of the socialist market economy.

Article 2 The term \"partnership enterprise\" refers to the general
partnership enterprises and limited liability partnership enterprises
which are established within China by natural persons, legal persons and
other organizations in accordance with the law.

A general partnership enterprise may be formed by general partners. The
partners shall bear unlimited joint and several liabilities for the
debts of the partnership enterprise. If this Law has any special
provisions on the way in which the general partners shall bear
liabilities, these special provisions shall prevail.

A limited liability partnership enterprise shall be formed by general
partners and limited partners. The general partners shall bear unlimited
joint and several liabilities for the debts of the limited liability
partnership enterprise. The limited partners bear the liabilities for
its debts to the extent of their capital contributions.

Article 3 No wholly state-funded company, state-owned company, listed
company, public-welfare-oriented public institution or social
organization may become a general partner.

Article 4 A partnership agreement shall be concluded in writing upon the
consensus of all partners.

Article 5 The principle of willingness, equality, fairness and good
faith in the conclusion of a partnership agreement and in the
establishment of a partnership enterprise.

Article 6 For the production and business operation incomes and other
incomes of a partnership enterprise, the partners shall pay their
respective income tax in accordance with the relevant tax provisions of
the state.

Article 7 A partnership enterprise and its partners shall abide by the
laws, administrative regulations, social morals, commercial morals and
bear social liabilities.

Article 8 The legitimate property, rights and interests of a partnership
enterprise and its partners shall be protected by law.

Article 9 To establish a partnership enterprise, the applicant shall
submit to the enterprise registration organ a registration application,
partnership agreement, identity certificates of the partners and other
documents.

If the business scope of a partnership enterprise contains any item
which is subject to approval prior to registration under a law or
administrative regulation, such business shall be subject to approval in
accordance with the law and the approval document shall be submitted at
the time of registration.

Article 10 If the registration application materials submitted by an
applicant are complete and conform to the statutory form and if the
enterprise registration organ can finish the registration on the spot,
the enterprise registration organ shall do so and shall issue to the
applicant a business license.

Except for the circumstance as mentioned in the preceding Paragraph, the
enterprise registration organ shall, within 20 days after it accepts an
application, decide whether or not to register. If it decides to
register it, it shall issue to the applicant a business license. If it
decides not to register it, it shall give a written reply to the
applicant and make an explanation.

Article 11 The date of issuance of business license of a partnership
enterprise shall be the date of establishment of the partnership
enterprise.

Before a partnership enterprise obtains a business license, the partners
shall not engage in the partnership business in the name of a
partnership enterprise.

Article 12 Where a partnership enterprise intends to establish a branch,
it shall apply to the enterprise registration organ of the place where
the to-be-established branch is located for registration so as to obtain
a business license.

Article 13 Where any of the partnership enterprise registration items is
changed, the partners executing the partnership affairs shall, within 15
days after they make a decision of change or after the change occurs,
apply to the enterprise registration organ for modifying the
registration.

Chapter II General partnership Enterprises

Section 1 Establishment of A Partnership Enterprise

Article 14 To establish a partnership enterprise, the following
conditions shall be satisfied:

(1)Having 2 or more partners. If the partners are natural persons, they
shall have complete civil capacity;

(2)Having a written partnership agreement;

(3)Having capital contributions subscribed to or actually paid by the
partners;

(4)Having a name and a production and business operation place for the
partnership enterprise; and

(5)Other conditions as provided for by laws and administrative
regulations.

Article 15 The name of a partnership enterprise shall be indicated by
the words \"General partnership\".

Article 16 A partner may make capital contributions in money, in kind,
or intellectual property right, land use right or other properties, or
labor services.

Where a partner intends to make capital contributions in kind,
intellectual property right, land use right and other properties, of
which the price should be assessed, the price may be determined by all
partners through negotiation or may assessed by the a statutory
assessment institution entrusted by all partners.

Where a partner makes capital contributions by labor services, the
assessment method shall be determined by all partners and shall be
stated in a partnership agreement.

Article 17 A partner shall perform the capital contribution obligation
according to the way and amount of capital contribution and the time
limit for payment as stipulated in the partnership agreement.

For the capital contributions in non-monetary properties for which the
formalities for the transfer of property right shall be gone through
under any law or administrative regulation, the partner shall go through
the said formalities.

Article 18 A partnership agreement shall state the following matters:

\(1\) The name and address of the main business operation place of a
partnership enterprise;

\(2\) The purpose and business scope of partnership;

(3)The name and domicile of each partner;

(4)The ways and amount of capital contribution by partners and the time
limit for payment;

(5)The profit distribution and loss sharing;

(6)The execution of the partnership affairs;

(7)The admission to and withdrawal from partnership;

(8)The settlement of disputes;

(9)The dissolution and liquidation of the partnership enterprise; and

(10)The liabilities for breach of contract.

Article 19 A partnership agreement shall enter into force after all
partners affix their signatures or seals to it. The partners shall enjoy
their rights and perform their duties according to the partnership
agreement.

The revision or supplement of an agreement shall be subject to the
unanimous consent of all partners, unless it is otherwise stipulated in
the partnership agreement.

For any matter which is not stipulated or not expressly stipulated in
the partnership agreement, it may be decided by the partners through
negotiation. For failure of negotiation, it may be handled in accordance
with this Law, other laws and administrative regulations.

Section 2 Property of A Partnership Enterprise

Article 20 All the capital contributions made by partners, the proceeds
and other properties acquired in the name of a partnership shall be the
properties of the partnership enterprise.

Article 21 Prior to the liquidation of a partnership enterprise, no
partner may request for dividing the properties of the partnership
enterprise, unless it is otherwise provided for in this Law.

If the partners privately transfer or dispose of the properties of a
partnership enterprise prior to liquidation, the partnership enterprise
shall not challenge any bona fide third party.

Article 22 Unless it is otherwise provided for in the partnership
agreement, when a partner assigns its entire or partial share of
properties of a partnership enterprise, it (he) shall acquire the
unanimous consent of all other partners.

In the case of assignment of a partner\' entire or partial share of
properties of a partnership enterprise to another partner, the other
partners shall be informed of this assignment.

Article 23 Where a partner intends to assign its (his) entire or partial
share of properties of a partnership enterprise to a non-partner, the
other partners have a preemptive right under the same conditions, unless
it is otherwise stipulated in the partnership agreement.

Article 24 Where a non-partner accepts a partner\'s share of properties
of a partnership enterprise in accordance with the law, it (he) becomes
a partner of the partnership enterprise as soon as the partnership
agreement is revised and shall enjoy the rights and perform the
obligations in accordance with this Law and the post-revision
partnership agreement.

Article 25 Where a partner puts its share of properties of the
partnership enterprise in pledge, it shall acquire the unanimous consent
of other partners. Without unanimous consent of other partners, its
(his) act shall be invalidated. If such an act results in any loss to
the bona fide third party, the act doer shall be liable for
compensation.

Section 3 Execution of Partnership Affairs

Article 26 The partners enjoy equal rights to the execution of
partnership affairs.

According to the stipulations of the partnership agreement or upon
decision of all partners, one or several partners may be authorized to
execute the partnership affairs on behalf of the partnership enterprise.

Where a legal person partner or any other organization partner executes
the partnership affairs, the representative whom it authorizes shall
execute the partnership affairs.

Article 27 Where one or several partners are entrusted to execute the
partnership affairs in accordance with Paragraph 2 of Article 26 of this
Law, the other partners no longer execute the partnership affairs.

The partners who do not execute the partnership affairs shall have the
right to supervise the execution of the partnership affairs.

Article 28 Where one or several partners execute partnership affairs,
they shall regularly report to the other partners about the execution of
the relevant affairs, the business operations and financial status of
the partnership enterprise. The proceeds derived from the execution of
partnership affairs shall attribute to the partnership enterprise and
the expenses and losses incurred from it shall be paid by the
partnership enterprise.

In order to know the business operations and financial status of the
partnership enterprise, the partners have the right to consult the
account books and other financial materials of the partnership
enterprise.

Article 29 If each partner may separately execute the partnership
affairs, the partners executing the partners may raise objections to the
affairs executed by other partners. When raising objections, the
execution of such affairs shall be suspended. If any dispute arises, a
decision shall be made in accordance with Article 30 of this Law.

Where a partner which is entrusted to execute the partnership affairs
fails to execute the partnership affairs according to the partnership
agreement or decision of all partners, the other partners may decide to
revoke the entrustment.

Article 30 The partners shall make a resolutions on the relevant matters
of the partnership enterprise and shall handle them according to the
voting method as stipulated in the partnership agreement. If it is not
stipulated or not expressly stipulated in the partnership agreement, the
voting method of \"one partner, one vote\" and \"pass upon more than
half of the votes of all partners\" shall be adopted.

It this Law provides otherwise for the voting method of a partnership
enterprise, this Law shall prevail.

Article 31 Unless it is otherwise stipulated in the partnership
agreement, the following matters of a partnership enterprise shall be
subject to the unanimous consent of all partners:

(1)To change the name of the partnership enterprise;

(2)To change the business scope and the address of the main business
place of the partnership enterprise;

(3)To dispose of the real property of the partnership enterprise;

(4)To assign or dispose of the intellectual property and other property
rights of the partnership enterprise;

(5)To provide a guaranty to others on behalf of the partnership
enterprise; and

(6)To hire a non-partner to act as a business manager of the partnership
enterprise.

Article 32 No partner may, solely or jointly with others, operate any
business competing with this partnership enterprise.

Unless it is otherwise stipulated in the partnership agreement or unless
it is unanimously consented by all partners, no partner may have any
transaction with this partnership enterprise.

No partner may engage in any activity which may impair the interests of
this partnership enterprise.

Article 33 The distribution of profits or sharing of losses of the
partnership enterprise shall follow the stipulations of the partnership
agreement. If it is not stipulated or not expressly stipulated in the
partnership agreement, a decision shall be made by the partners through
negotiation. In case the negotiations fail, the distribution of profits
or sharing of losses shall be made in proportion to the actual capital
contributions made by the partners. If it is unable to determine the
proportions of capital contributions, the profits or losses shall be
distributed or shared equally by the partners.

It shall not be stipulated in any partnership agreement that all profits
will be distributed to some of the partners or that some partners will
bear all losses.

Article 34 According to the stipulation of the partnership agreement or
the decision of all partners, the partners may increase or decrease
their capital contributions to the partnership enterprise.

Article 35 A business manager hired by a partnership enterprise shall
perform his duties within the scope authorized by the partnership
enterprise.

Where a business manager hired by a partnership enterprise performs his
duties beyond the scope authorized by the partnership enterprise, or if
he causes any loss to the partnership enterprise because of his
intentional or serious fault, he shall be liable for compensation.

Article 36 A partnership enterprise shall, in accordance with the laws
and administrative regulations, establish an enterprise financial and
accounting system.

Section 4 Relationship Between A Partnership Enterprise and Third
Persons

Article 37 The restrictions of a partnership enterprise on the
partners\' execution of partnership affairs as well as on their right to
represent the partnership enterprise in the face of outsiders shall not
challenge any bona fide third party.

Article 38 A partnership enterprise shall pay for its debts with all of
its properties.

Article 39 Where a partnership enterprise fails to settle any mature
debt, the partners shall bear joint and several unlimited liabilities.

Article 40 Where the amount of payment made by a partner exceeds the
loss sharing proportion as prescribed in Paragraph 1 in Article 33 of
this Law because it (he) bears joint and several unlimited liabilities,
it (he) has right to demand the other partners to make reimbursements.

Article 41 Where a partner incurs any debt irrelevant to the partnership
enterprise, the relevant creditor shall not offset its credit against
the debt it owe to the partnership enterprise, nor may it exercise the
said partner\'s rights in the partnership enterprise by substituting
this partner.

Article 42 If the partner\'s own properties are insufficient to pay off
its debt irrelevant to the partnership enterprise, this partner may use
the proceeds, which it (he) acquires from the partnership enterprise, to
pay for the debt. The creditor may also plead the people\'s court to
enforce the repayment of the debt by the said partner\'s property share
in the partnership enterprise according to the law.

When the people\'s court enforces the repayment of the debt by the said
partner\'s property share, it shall send a notice to all partners. The
other partners have the preemptive right to the property share of the
said partner. If the other partners do not purchase it, nor consent to
assign it to others, a withdrawal settlement shall be made for this
partner in accordance with Article 51 of this Law, or a settlement shall
be made to decrease the property share of this partner correspondingly.

Section 5 Admission to and Withdrawal from Partnership

Article 43 The admission of a new partner shall, unless it is otherwise
stipulated in the partnership agreement, be subject to an unanimous
consent of all partners, and for which a written agreement shall be
concluded.

When concluding an agreement on the admission to the partnership, the
original partners shall faithfully inform the new partners of the
business operation and financial status of the original partnership
enterprise.

Article 44 A new partner admitted to a partnership enterprise shall
enjoy the same rights and bear the same liabilities as the original
partners. If the partnership agreement stipulates otherwise, the said
agreement shall prevail.

A new partner shall bear joint and several liabilities for the debts of
the partnership enterprise incurred before it is admitted to a
partnership enterprise.

Article 45 Where the term of operation of a partnership business has
been set in the partnership agreement, a partner may, during the period
of existence thereof, withdraw from partnership in any of the following
cases:

\(1\) Any cause for withdrawal from partnership as stipulated in the
partnership agreement occurs;

\(2\) All partners agree to the withdrawal;

\(3\) Any cause to make the said partner difficult to remain in the
partnership occurs; or

\(4\) Other partners seriously violate their obligations as stipulated
in the partnership agreement.

Article 46 Where a partnership agreement fails to stipulate the term of
partnership, a partner may withdraw from the partnership, provided that
the execution of the affairs of the partnership enterprise will not be
affected, but it (he) shall inform the other partners 30 days prior to
its (his) withdrawal.

Article 47 Where any partner withdraws from a partnership in violation
of Articles 45 and 46, he shall compensate for the losses that he has
incurred to the partnership enterprise.

Article 48 Where any partner is under any of the following
circumstances, the said partner shall be deemed to have withdrawn
naturally from the partnership:

\(1\) A natural person partner is deceased or declared deceased
according to law;

(2)It (he) is insolvent;

(3)A partner as a legal person or any other organization whose business
license is revoked, or who is ordered to close up for revocation, or who
is declared bankrupt;

\(4\) A partner loses the relevant qualifications as required by law or
as stipulated in the partnership agreement; or

\(5\) A partner\'s entire property share in the partnership business has
been executed by the people\'s court.

For a partner who is determined as a person without civil capacity or
with limited civil capacity according to law, he may be changed into a
limited partner upon unanimous consent of the other parties and the
general partnership enterprise shall be changed into a limited
partnership enterprise in pursuance of law. For failure of unanimous
consent of the other partners, this partner without civil capacity or
with limited civil capacity shall withdraw from the partnership.

The withdrawal from partnership shall be take effect on the date when it
is actually made.

Article 49 Where a partner is under any of the following circumstances,
a resolution may be made to remove the said partner upon the unanimous
consent of the other partners:

(1)Failing to perform the obligation to make capital contributions;

\(2\) Causing any loss to the partnership enterprise for intentional or
serious wrongful act;

\(3\) Conducting any improper act in executing the partnership affairs;
and

\(4\) Other causes as stipulated in the partnership agreement.

A written notice of the resolution on the removal of a partner shall be
sent to the person who is removed. The removal shall take effect on the
date when the person who is removed receives the removal notice, and the
person who is removed shall withdraw from partnership.

Where the person who is removed challenges the removal resolution, it
(he) may be initiate a lawsuit to be people\'s court within thirty days
after receipt of the removal notice.

Article 50 Where a partner is deceased or declared deceased, the heir
who enjoys the legitimate right to inherit the said partner\'s property
share in a partnership enterprise shall, according to the stipulation of
the partnership agreement or upon the unanimous consent of all partners,
obtain the qualification for being a partner of the said partnership
enterprise as of the date of succession.

Under any of the following circumstances, the partnership enterprise
shall return the property share of the inherited partner to his heir:

(1)The heir is unwilling to become a partner;

(2)The heir has not obtained the qualifications of a partner as required
in any law or as stipulated in the partnership agreement; or

(3)Any other circumstances as stipulated in the partnership agreement,
under which the heir can not become a partner.

If the heir of the said partner is a person without civil capacity or
with limited civil capacity, he may, upon unanimous consent of all
partners, become a limited partner in accordance with the law, and the
general partnership enterprise changes into a limited partnership
enterprise. For failure of unanimous consent of all partners, the
partnership enterprise shall return the property share of the inherited
partner to this heir.

Article 51 When a partner withdraws from the partnership, the other
partners shall, on the basis of the property status of the partnership
enterprise at the time of withdrawal, make a settlement and return the
property share to him. If he is liable to compensate the losses to the
partnership, the amount of compensation shall be deducted from the
aforesaid property share.

If there is any pending partnership affair at the time of withdrawal
from partnership, the settlement shall not be made until it is finished.

Article 52 The measures for the return of property shares of partnership
enterprise to a partner who withdraws from the partnership shall be
stipulated in the partnership agreement or be decided by all partners.
The return of property shares may be in money or in kind.

Article 53 A partner who withdraws from the partnership shall bear joint
and several unlimited liabilities for the debts which have been incurred
to the partnership enterprise before his withdrawal.

Article 54 When a partner withdraws from the partnership, if the
partnership enterprise\'s properties are less than its debts, he shall
share the losses in accordance with Paragraph 1 of Article 33 of this
Law.

Section 6 Special General partnership Enterprises

Article 55 A professional service institution, which provides its
clients with paid services on the basis of professional knowledge and
special skills, may set up a special general partnership enterprise.

The term \"special general partnership enterprise\" refers to a general
partnership enterprise which the partners bear liabilities in accordance
with Article 57 of this Law.

A special general partnership enterprise is governed by the provisions
of this Section. If any matter is not provided for in this Section, it
shall be governed by the provisions of Sections 1 through 5 of this
Chapter.

Article 56 The name of a special general partnership enterprise shall be
indicated by the words \"special general partnership\".

Article 57 A partner or several partners shall bear unlimited
liabilities or unlimited joint and several liabilities for the debts
incurred to the partnership enterprise because of his (their)
intentional or serious wrongful act.

All partners shall bear joint and several liabilities for the debts
incurred by any partner(s) to the partnership enterprise because of his
(their) intentional or serious wrongful act, and for other debts of the
partnership enterprise.

Article 58 If the debts incurred by any partner(s) to the partnership
enterprise because of his (their) intentional or serious wrongful act
are paid with the properties of the partnership enterprise, the said
partner(s) shall, according to the stipulations of the partnership
agreement, be liable to compensate for the losses to the partnership
enterprise.

Article 59 A special general partnership enterprise shall prepare a
practicing risk fund and buy an occupational insurance.

The practicing risk fund shall be used for repaying the debts incurred
by the partners during their practices. It shall be managed by opening a
separate bank account. The concrete management measures shall be
formulated by the State Council.

Chapter III Limited Partnership Enterprises

Article 60 A limited partnership enterprises and its partners shall be
governed by the provisions of this Chapter. If any matter is not covered
in this Chapter, it shall be governed by the provisions of Sections 1
through 5 of Chapter II of this Law on general partnership enterprises
and their partners.

Article 61 A limited partnership enterprise shall be established by not
less than 2 but not more than 50 partners, unless it is otherwise
provided by law.

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

Article 62 The name of a limited partnership enterprise shall be
indicated by the words \"limited partnership\".

Article 63 A partnership agreement shall not only meet the provisions of
Article 18 of this Law, but also state the following items:

(1)The name and address of the general partners and limited partners;

(2)The conditions which the partners to execute the partnership affairs
shall meet, and the procedures for selecting such partners;

(3)The limits on the power of partners to execute the partnership
affairs, and the measures for handling their breach of contract;

(4)The conditions for the removal of partners to execute the partnership
affairs, and the procedures for replacing them by new ones;

(5)The conditions and procedures for the admission and withdrawal of
limited partners, and other relevant liabilities; and

(6)The procedures for the mutual conversion of limited partners and
general partners.

Article 64 A limited partner may make capital contributions in money, in
kind, or intellectual property right, land use right or other
properties.

No limited partner may make capital contributions in labor services.

Article 65 A limited partner shall make full payment of the capital
contributions within the time limit as stipulated in the partnership
agreement. If it fails to do so, it shall be obliged to make up the
payment and shall bear the liabilities for breach of contract to the
other partners.

Article 66 The registration items of a limited partnership enterprise
shall specify the name of each limited partner, and the amount of
capital contributions which he subscribes to.

Article 67 The partnership affairs of a limited partnership enterprise
shall be executed by the general partners. The partners to execute the
partnership affairs may request for determining their remunerations and
the way of obtaining the remunerations in the partnership agreement.

Article 68 A limited partner may not execute the partnership affairs,
nor may he represent the limited partnership enterprise before
outsiders.

The following acts of a limited partner shall not be deemed as execution
of partnership affairs:

\(1\) To participate in making a decision about the admission or
withdraw of a general partner;

\(2\) To put forward a proposal on the business management of the
enterprise;

\(3\) To participate in choosing an accounting firm to handle the audit
business of the limited partnership enterprise;

\(4\) To obtain a financial report of the limited partnership enterprise
upon audit;

\(5\) To consult the account books of the limited partnership enterprise
and other financial materials which concern the limited partner\'s own
interests;

\(6\) To file claims or lodge a lawsuit against the liable partner(s)
when this limited partner\'s interests in the limited partnership
enterprise are impaired;

\(7\) When the partner(s) responsible for executing the partnership
affairs is (are) fails to exercise his (their rights), to urge them to
exercise their rights or initiate a lawsuit for protecting the interests
of this enterprise; and

\(8\) To offer a guaranty for this enterprise in accordance with the
law.

Article 69 No limited partnership enterprise may distribute all profits
to some of the partners, unless it is otherwise stipulated in the
partnership agreement.

Article 70 A limited partner may make transactions with the limited
partnership enterprise to which it (he) belongs, unless it is otherwise
stipulated in the partnership agreement.

Article 71 A limited partner may, solely or jointly with others, operate
a business which is competing with this limited partnership enterprise,
unless it is otherwise stipulated in the partnership agreement.

Article 72 A limited partner may put its share of properties of the
partnership enterprise in pledge, unless it is otherwise stipulated in
the partnership agreement.

Article 73 A limited partner may, according to the stipulations of the
partnership agreement, assign it share of properties of the limited
partnership enterprise to a non-partner, but he shall notify the other
partners 30 days in advance.

Article 74 If the limited partner\'s own properties are insufficient to
pay off his debt irrelevant to the partnership enterprise, this partner
may use the proceeds which he acquires from the limited partnership
enterprise to pay for the debt. The creditor may also plead the
people\'s court to enforce the repayment of the debt with the said
limited partner\'s property share in the partnership enterprise
according to the law.

When the people\'s court enforces the repayment of the debt with the
said limited partner\'s property share, it shall send a notice to all
partners. The other partners have the preemptive right to the property
share of the said partner under the same conditions.

Article 75 Where merely limited partners are left in a limited
partnership enterprise, this limited partnership enterprise shall be
dissolved. Where merely general partners are left in a limited
partnership enterprise, this limited partnership enterprise shall be
changed into a general partnership enterprise.

Article 76 Where it is reasonable for a third person to believe a
limited partner as a general partner and make a transaction with him,
this limited partner shall bear the same liabilities for this
transaction as a general partner shall do.

Where a limited partner makes, without authorization, a transaction with
any other person and causes any losses to the limited partnership
enterprise or to other partners, he shall be liable for compensation.

Article 77 A new limited partner shall, to the extent of the amount of
capital contribution he subscribes to, bear liabilities for the debts
incurred to the limited partnership enterprise prior to his admission.

Article 78 Where any limited partner is under any of the circumstances
as listed in Items (1), (3) and (5) of Paragraph 1 of Article 48 of this
Law, the said limited partner shall be deemed to have withdrawn
naturally from the partnership.

Article 79 Where a natural person as a limited partner loses his civil
capacity during the period of existence of a limited partnership
enterprise, the other partners shall not require him to withdraw from
the partnership for this reason.

Article 80 When a natural-person limited partner is deceased or declared
deceased, or when a legal person or any other organization limited
partner is terminated, his heir or its successor to the rights may
obtain the qualifications of the limited partner in the limited
partnership enterprise.

Article 81 After a limited partner withdraws from the partnership, it
(he) shall, to the extent of the properties it (he) takes back from the
limited partnership enterprise at the time of withdrawal, bear the
liabilities for the debts incurred to the limited partnership enterprise
prior to its (his) withdrawal.

Article 82 Unless it is otherwise stipulated in the partnership, the
change of a general partner into a limited partner or the change of a
limited partner into a general partner shall be subject to unanimous
consent of all partners.

Article 83 Where a limited partner is changed into a general partner, it
(he) shall bear joint and several unlimited liabilities for the debts
incurred to the limited partnership enterprise during the period when it
(he) is a limited partner.

Article 84 Where a general partner is changed into a limited partner, it
(he) shall bear joint and several unlimited liabilities for the debts
incurred to the partnership enterprise during the period when it (he) is
a general partner.

Chapter IV Dissolution and Liquidation of A Partnership Enterprise

Article 85 A partnership enterprise shall be dissolved under any of the
following circumstances:

\(1\) The term of partnership expires and the partners decide not to
operate it any longer;

\(2\) Any of the dissolution causes as stipulated in the partnership
agreement occurs;

\(3\) All partners make a decision to dissolve it;

\(4\) 30 days have lapsed since the number of partners fails to reach
the quorum;

\(5\) The partnership aim as stipulated in the partnership agreement has
been realized or is unable to be realized;

\(6\) Its business license is revoked, or it is ordered to close up or
to be revoked; or

\(7\) Other reasons as provided for by any law or administrative
regulation.

Article 86 When a partnership is dissolved, it shall be liquidated by
liquidators.

All partners shall act as liquidators. Upon consent of more than half of
all partners, one or several partners or third persons may, after the
occurrence of the cause for the dissolution of the partnership
enterprise, be designated or entrusted to act as liquidators.

With 15 days after the occurrence of the cause for the dissolution of
the partnership enterprise, the partners or other interest parties may
apply to the people\'s court to designate liquidators.

Article 87 The liquidators shall handle the following affairs during the
process of liquidation:

\(1\) To sort out the properties of the partnership enterprise, and
prepare the balance sheets and the property list of the said business;

\(2\) To handle the pending affairs of the partnership enterprise that
are related to the liquidation;

\(3\) To pay up taxes payable;

\(4\) To settle credits and debts;

\(5\) To handle the remaining properties after the partnership
enterprise repays its debts; and

\(6\) To participate in lawsuits or arbitrations on behalf of the
partnership enterprise.

Article 88 The liquidators shall, within 10 days after a decision of
dissolution is made, inform the creditors of the relevant matters and
publish an announcement on a newspaper within 60 days. A creditor shall,
within 30 days from the day when it receives a notice or within 45 days
from the announcement date if it fails to receive a notice, declare its
credits to the liquidators.

When a creditor declares its credits, it shall state the relevant
matters of the credits and provide supporting materials. The liquidators
shall record the credits.

During the process of liquidation, the partnership enterprise still
exists but it shall not carry out any business activities irrelevant to
the liquidation.

Article 89 After paying off the liquidation expenses, wages of
employees, social insurance premiums and legal indemnities, the
outstanding taxes and the debts with the properties of the partnership
enterprise, the residual properties may be distributed in accordance
with Paragraph 1 of Article 33 of this Law.

Article 90 After the liquidation is ended, the liquidators shall prepare
a liquidation report. Within 15 days after the liquidation report is
affixed with the signatures and seals of all partners, it shall be
submitted to the enterprise registration organ for deregistration of the
partnership enterprise.

Article 91 After the deregistration of a partnership enterprise, the
former general partners shall still bear joint and several liabilities
for the debts incurred during the existence period of the partnership
enterprise.

Article 92 Where a partnership enterprise is unable to meet its mature
debts, the creditors may apply to the people\'s court for bankruptcy
liquidation or may demand the general partners to make repayments.

Where a partnership enterprise is declared bankrupt, the general
partners shall still bear joint and several liabilities for the debts of
the partnership enterprise.

Chapter V Legal Liabilities

Article 93 Anyone who obtains the registration of a partnership
enterprise by violating this Law, such as providing false documents or
taking other fraudulent means, shall be ordered to make a correction by
the enterprise registration organ and shall be fined not less than 5,
000 yuan but not more than 50, 000 yuan. If the circumstance is serious,
the enterprise registration shall be revoked and a fine of not less than
50, 000 yuan but not more than 200, 000 yuan shall be given.

Article 94 Where a partnership enterprise fails to indicate his name
with the words \"general partnership\" or \"special partnership\" or
\"limited partnership\" as in violation of this Law, it shall be ordered
to make a correction by the enterprise registration organ and shall be
fined not less than 2, 000 yuan but not more than 10, 000 yuan.

Article 95 Anyone who has not obtained a business license but is
engaging in partnership business operations in the name of a partnership
enterprise or branch of a partnership enterprise as in violation of this
Law shall be ordered to stop such business operations by the enterprise
registration organ and shall be fined not less than 5, 000 yuan but not
more than 50, 000 yuan.

Where a partnership enterprise fails to modify the registration for the
change of any registration item as in violation of this Law, it shall be
ordered to go through the registration formalities. If it fails to do
so, it shall be fined not less than 2, 000 yuan but not more than 20,
000 yuan.

Where any registration item of a partnership enterprise changes, if the
partners executing the partnership affairs fail to timely go through the
registration modification formalities, it shall compensate for any loss
incurred therefrom to the partnership enterprise, other partners or bona
fide third persons.

Article 96 Where any partner executing the partnership affairs or any
practitioner of a partnership enterprise, by taking the advantage of his
position, usurps any benefit which should attribute to the partnership
enterprise, occupy any property of the partnership enterprise by other
illegal means, it (he) shall return the benefit or property to the
partnership enterprise. If its (his) act causes any loss to the
partnership enterprise or to other partners, it (he) shall bear the
compensation liabilities.

Article 97 Where any partner, with no unanimous consent of all partners,
handles by himself any affair which shall be subject to the unanimous
consent of all partners under this Law or according to this partnership
agreement, if his (its) act causes any loss to the partnership
enterprise or to other partners, it (he) shall bear compensation
liabilities.

Article 98 Where any partner, who does not have the power to execute the
affairs of the partnership affairs, illegally executes such affairs, if
its (his) act causes any losses to the partnership enterprise or to
other partners, it (he) shall bear compensation liabilities.

Article 99 Where any partner engages in any business competing with this
partnership enterprise or makes transactions with this partnership
enterprise as in violation of the provisions of this Law or the
stipulations of the partnership agreement, the relevant proceeds shall
attribute to the partnership enterprise. If any loss is caused to the
partnership enterprise or to other partners, it (he) shall bear
compensation liabilities.

Article 100 Where any liquidator fails to submit a liquidation report to
the enterprise registration organ as required by this law, or submit a
liquidation report which conceals or omits any important fact, he shall
be ordered to make a correction by the enterprise registration organ.
The expenses and losses incurred therefrom shall be paid and compensated
by the liquidator.

Article 101 Where any liquidator seeks any illegal income or usurps any
property of a partnership enterprise during the process of executing the
liquidation affairs, he shall return the said income or property to the
partnership enterprise. Where any loss is caused to the partnership
enterprise or to other partners, he shall bear compensation liabilities.

Article 102 Where any liquidator impairs the interests of creditors as
in violation of this Law, such as concealing or transferring any
property of a partnership enterprise, or making any false record in the
balance sheet or in the property list, or distributing properties prior
to the settlement of debts, he shall bear compensation liabilities.

Article 103 Where any partner breaches the agreement of partnership, it
(he) shall be liable for breach of contract.

Where there is any dispute between the partners over the execution of
the partnership agreement, the partners may settle it through
negotiations or mediation. If they are unwilling or fail to settle it
through negotiations or medication, they may apply to the arbitration
institution for arbitration according to the arbitration clause in the
partnership agreement or under the written arbitration agreement
concluded afterwards. If there is no arbitration clause in the
partnership agreement and if they fail to reach any written arbitration
agreement afterwards, they may initiate a lawsuit in the people\'s
court.

Article 104 Where any of the functionaries of the relevant
administrative organs impairs the legitimate rights and interests of the
partnership enterprise as in violation of this law, such as abusing his
power, seeking private benefits, accepting bribes, he shall be given an
administrative sanction.

Article 105 Anyone who commits any act in violation of this Law shall
bear criminal liabilities.

Article 106 Anyone who violates this Law shall bear civil compensation
liabilities and pay the monetary penalties or fines. If his property is
insufficient to pay the said items simultaneously, he shall first bear
civil compensation liabilities.

Chapter VI Supplementary Provisions

Article 107 Where a non-enterprise professional service institution
takes the form of partnership in accordance with the relevant law, the
liabilities of its partners shall be governed by the provisions of this
Law on the liabilities of the partners of a special general partnership
enterprise.

Article 108 The administrative measures for the establishment of
partnership enterprises by foreign enterprises or individuals shall be
formulated by the State Council.

Article 109 This Law shall come into force as of June 1, 2007.