A sole proprietorship enterprise refers to a business entity established in China according to law and invested by a natural person. The investor's property belongs to the investor, and the investor shall bear unlimited liability for the debts of the enterprise with his personal property.
A sole proprietorship enterprise has the following characteristics:
(1) The investor of a sole proprietorship enterprise is a natural person. The natural person shall have full capacity for civil conduct and shall not be a person prohibited from engaging in profit-making activities by laws and administrative regulations.
(2) The property of a sole proprietorship enterprise belongs to individual investors. The enterprise property here includes not only the initial property invested by investors when the enterprise is established, but also the property accumulated during the existence of the enterprise. The investor is the sole legal owner of the property of a sole proprietorship enterprise.
(3) Investors shall bear unlimited liability for corporate debts with their personal property. This is an important feature of a sole proprietorship enterprise. That is to say, when the registered capital contribution of the investor is insufficient to pay off the debts incurred by the sole proprietorship enterprise, the investor must pay off the debts with his personal property or even family property.
(4) A sole proprietorship enterprise does not have legal person status. Although a sole proprietorship enterprise can have a brand name, it can engage in business activities and participate in litigation activities in the name of the enterprise, but in essence, a sole proprietorship enterprise is only a special form of natural person's business activities and belongs to the category of natural person enterprises.
The difference between a sole proprietorship enterprise and an individual industrial and commercial household is as follows:
(1) Different investors. The investors of a sole proprietorship enterprise can only be natural persons; Individual industrial and commercial households can be established by a natural person or a family as a unit.
(2) The scope of the property to be responsible is different. Under normal circumstances, the investor of a sole proprietorship enterprise only bears unlimited liability for the debts of the enterprise with his personal property. Only when the enterprise is established and registered, the family common property is clearly used as the personal contribution can the family common property bear unlimited liability for the debts of the enterprise according to law; According to Article 29 of the General Principles of the Civil Law, the debts of individual industrial and commercial households shall be borne by personal property for individual businesses and family property for family businesses.
(3) The applicable law is different. A sole proprietorship enterprise shall be established in accordance with the Law on Sole proprietorship enterprises, and individual industrial and commercial households shall be established in accordance with the provisions of the General Principles of the Civil Law and the Interim Provisions on the Administration of Urban and Rural Individual Industrial and Commercial Households.
(4) Different legal status. A sole proprietorship enterprise is a business entity and a form of enterprise organization; Individuals: industrial and commercial households do not take the form of enterprises. The key to distinguish the two lies in whether the sole proprietorship enterprise has registered and obtained the business license of the sole proprietorship enterprise.
1. What is a private enterprise? How does the law identify private enterprises?
Traditionally, enterprises in China are divided into four types, namely, enterprises owned by the whole people, enterprises owned by collectives, enterprises with foreign investment and private enterprises. According to the Provisional Regulations on Private Enterprises in People's Republic of China (PRC) issued by the State Council 1988, private enterprises refer to profit-making economic organizations with private assets and more than 8 employees, including sole proprietorships, partnerships and limited liability companies. Among them, a sole proprietorship enterprise refers to an enterprise invested and operated by one person, and the investors of the sole proprietorship enterprise bear unlimited liability for the debts of the enterprise. A partnership enterprise refers to an enterprise established in China according to law and signed a written responsibility letter by each partner. Partnership refers to a profit-making organization established in China according to law. All partners enter into a written agreement to jointly invest, operate in partnership, share profits and risks, and bear unlimited joint and several liabilities for the debts of the partnership. Generally speaking, partnership includes two types: individual partnership and legal person partnership. However, there is no clear regulation on legal person partnership in Chinese law. According to the provisions of Articles 52 and 53 of the General Principles of Civil Law, joint cooperation between enterprises or between enterprises and institutions is called joint venture. Article 9 of the Partnership Enterprise Law clearly stipulates that partners should be persons with full capacity for civil conduct, that is, natural persons. This also ruled out the possibility of legal persons becoming partners. Therefore, partnership is likely to become one of the forms of private enterprises. Therefore, as one of the forms of private enterprises, partnership only reflects the partnership of natural persons, excluding private limited liability companies with joint sales personnel. It refers to an enterprise in which investors are liable to the company to the extent of their capital contribution, and the company is liable to the company's debts with all its assets.
1In March, 1999, Article 1 1 of the constitutional amendment clearly stipulated that "the non-public economy such as individual economy and private economy within the scope of law is an important part of the socialist market economy." It can be seen that the individual economy in the form of individual industrial and commercial households is not included in the category of private economy in China's laws.
With the promulgation of China's Law on Sole proprietorship enterprises, there is a great controversy in China's legal circles about whether sole proprietorship enterprises belong to private enterprises. A sole proprietorship enterprise refers to a business entity established in China according to law and invested by a natural person, whose property belongs to the investor and whose personal property bears unlimited liability for the debts of the enterprise. Because the law stipulates that sole proprietorship enterprises can recruit employees, but there is no limit on the number of employees, there may be many sole proprietorship enterprises with more than 8 employees. At the same time, the sole proprietorship enterprise law stipulates that investors shall bear unlimited responsibilities for two affairs of the enterprise. Therefore, there should not be much difference in nature between such a sole proprietorship enterprise and the sole proprietorship enterprise in the Provisional Regulations on Private Enterprises.
In addition, the characteristics of joint-stock companies invested by natural persons are completely consistent with those of private enterprises. Enterprise property is also privately owned, not collectively owned or owned by the state. Therefore, joint stock limited companies invested by natural persons should also belong to private enterprises.
To sum up, China's current private enterprises should include: wholly-owned enterprises, partnerships, limited liability companies and joint stock limited companies invested by natural persons.