Since the reform and opening up, sole proprietorship enterprises have developed rapidly in China and have now become an indispensable part of China's socialist market economy. Following the promulgation of the Company Law and the Partnership Enterprise Law, on August 30, 2009, the Law on Sole Proprietary Enterprises was adopted at the 1 1 meeting of the 9th the National People's Congress Standing Committee (NPCSC), which indicated that three basic enterprise forms of China's market economy had been established and the legal framework of modern enterprise system was initially formed. I. Legal Position of Sole proprietorship Enterprise A sole proprietorship enterprise is an enterprise established by one person. In western market economy countries, although wholly-owned enterprises account for a considerable proportion, there is no special law on wholly-owned enterprises in the United States and Canada. The legal norms about sole proprietorship are scattered in the Constitution and laws on taxation, monopoly, contract and bankruptcy [1], and the word sole proprietorship is unheard of even in Germany [2]. They adjust their wholly-owned enterprises according to civil law and commercial law. Because they think that individuals have complete control over the enterprise and can consider the interests of other components within the enterprise, such commercial enterprises do not exempt individuals from any responsibility, so there is no need to legislate separately to adjust the organization and operation of sole proprietorship enterprises [3]. Our country constructs the legal framework of market subject from the perspective of enterprise form, and the legal requirements that can be followed require that the sole proprietorship enterprises that coexist with companies and partnerships must have corresponding legal norms. Some people think that state-owned enterprises, cooperative or collective-owned enterprises or organizations, including various economic organizations controlled by state-owned and cooperative entities, are established according to the main system of economic law, while most other economic activities are established according to civil law and administrative law [4]. This view that the main body of non-public enterprises is artificially separated from the main body of public enterprises is not worth adopting. Because the market economy does not distinguish between public and private, all subjects are equal. The legislative system of market subject in China has gradually abandoned the legislative model of planned economy era, and the establishment of legal systems of companies, partnerships and sole proprietorship enterprises in China has reached a clear conclusion. In the process of legislation in China, due to the different understanding of "sole proprietorship", the legal status of sole proprietorship enterprises is also different. There are three main viewpoints: (1) "one investor" theory. It is believed that the scope of adjustment of the sole proprietorship enterprise law includes the sole proprietorship enterprises of natural persons and legal persons, including all enterprises operated by one person or one investor. That is to say, China's existing wholly state-owned enterprises, collectively-owned enterprises, wholly foreign-owned enterprises, privately-owned enterprises and individual industrial and commercial households (commonly known as contractors) can all be included in the adjustment scope of the sole proprietorship enterprise law [5]. This view is relatively broad. (2) The theory of "natural person investment". It is believed that a wholly-owned enterprise refers to an enterprise invested by a natural person, and its property belongs to the investor, who bears unlimited liability for the debts of the enterprise, and can be divided into private enterprises and wholly foreign-owned enterprises funded by foreigners [6]. This can be called a narrow sense. (3) The theory of "limited individual investment". Only a sole proprietorship enterprise is limited to enterprises established by a single natural person, excluding temporary vendors or street vendors without fixed places and home craftsmen without corresponding employees [7]. This is a narrow definition theory. The above-mentioned first viewpoint, taking the form of capital contribution as the defining standard, advocates that all wholly-owned enterprises should be included in the adjustment scope of the Law on Wholly-owned Enterprises, which is correct and ideal in theory. However, the wholly state-owned enterprises and collective enterprises in China are more complicated, so it is difficult to coordinate this legislation with the existing laws of industrial enterprises owned by the whole people, urban collective enterprises, rural collective enterprises and township enterprises. Therefore, some people think that there should be a transition period, and advocate that enterprises established by natural persons should be regulated first, and private enterprises, individual industrial and commercial households with a certain scale and enterprises established by foreign natural persons should be taken as the adjustment scope [7 ](p35). However, China's newly promulgated Law on Sole Proprietary Enterprises obviously adopts the strict "restriction" theory. Compared with the draft, the restrictive word "individual" is added to the law, and it is clearly defined as a natural person in the legal definition, excluding a wholly-owned enterprise as a legal person; Its annex stipulates that "this law is not applicable to wholly foreign-owned enterprises" and excludes foreigners. Therefore, the sole proprietorship enterprise law has considerable restrictions on sole proprietorship enterprises. According to the definition in Article 2 of this Law, "a sole proprietorship enterprise refers to an enterprise legal person established in China according to this Law, which is invested by a natural person, and the property belongs to the investor, who shall bear unlimited liability for the debts of the enterprise with his personal property." The author believes that the legal status of a sole proprietorship enterprise in China includes the following contents: First, sole proprietorship refers to an enterprise established by a natural person, and the invested natural person only refers to China people, excluding foreign businessmen. If a foreign natural person invests and establishes an enterprise in China alone, the Foreign-Capital Enterprise Law shall apply and it belongs to a foreign-capital enterprise. Then, can a single natural person from Hongkong, Macau and Taiwan Province Province become an investor in a wholly-owned enterprise in China? I don't think so. China implements one country, two systems. According to Article 85 of the Detailed Rules for the Implementation of the Law on Foreign-funded Enterprises, individuals in these areas and China citizens living abroad should refer to the Detailed Rules for the Implementation of the Law on Foreign-funded Enterprises to set up wholly-owned enterprises in the Mainland. In the trial practice, cases involving Hong Kong, Macao and Taiwan are also tried with reference to the relevant provisions on foreign-related cases. Therefore, the establishment of wholly-owned enterprises in China by compatriots from Hong Kong, Macao and Taiwan does not apply to the Law on Wholly-owned Enterprises, but is handled with reference to the provisions of foreign-funded enterprises. Second, the investment and the property acquired by the enterprise are owned by the investor, who is the owner of the enterprise. The distinctive feature of a sole proprietorship enterprise is that it belongs to an individual. The investors' investment and income in the enterprise are all owned by the individual, and the investors enjoy the ownership of the enterprise property, and their related rights can be transferred or inherited according to law. At the same time, the investor is also the person in charge and representative of the enterprise, and enjoys the management right of the enterprise. Of course, he can manage the affairs of the enterprise by himself, or entrust or hire other people with civil capacity to be responsible for the affairs management of the enterprise. Entrusting or employing others to manage enterprise affairs to form an entrustment contract relationship, a written entrustment contract shall be signed with the client or the employer according to law, specifying the specific content of entrustment and the scope of rights granted. If the interests of a bona fide third party are damaged due to unclear authorization, it shall bear civil liability, and the trustee shall be jointly and severally liable for the entrusted act that is known to be unclear authorization. The investor's restriction on the functions and powers of the trustee or employer shall not be against a bona fide third party. Third, a sole proprietorship enterprise is an unincorporated organization, and investors bear unlimited liability for the debts of the enterprise with their personal property. A sole proprietorship enterprise is not a legal person, and its civil rights and obligations shall be enjoyed and assumed by the investor, that is, the owner of the enterprise, and the investor shall bear unlimited liability for the debts of the enterprise with his personal property. Although a sole proprietorship enterprise is similar to a one-man company, a one-man company is an enterprise legal person, and the company independently bears civil liability with the enterprise property, and the investor only bears limited liability to the company to the extent of its capital contribution. China's law does not stipulate one-man company (a wholly state-owned company is a special form of limited liability company). Therefore, a sole proprietorship enterprise can only be a sole proprietorship enterprise with more capital, more personnel and larger scale, and cannot become a company. Because the investors of a sole proprietorship enterprise bear unlimited liability for the debts of the enterprise with their personal property, it avoids the possibility that the shareholders of a one-man company abuse the corporate personality to harm the interests of creditors, thus saving the trouble for the court to use the system of "denying the corporate personality" in the trial of the case. Fourth, enterprises are market operators established in China, excluding individual traders and individual industrial and commercial households with unnecessary employees. The so-called "establishment in China" refers to the establishment in China and within the national boundaries, excluding foreign countries outside the national boundaries and Hong Kong, Macao and Taiwan that have demarcated borders with Hong Kong, Macao and Taiwan Province. The so-called "business entity" refers to a production and operation organization with a certain scale, including a fixed production and operation place, necessary production and operation conditions and necessary employees. The requirements of these conditions distinguish sole proprietorship enterprises from individual industrial and commercial households whose citizens have obtained business licenses after registration. For those individual industrial and commercial households with abundant funds and considerable scale, they have got rid of the business mode of setting up stalls and mobile sales, and meet the conditions of sole proprietorship enterprises, they should be allowed to turn into sole proprietorship enterprises. As for the stipulation in the Provisional Regulations on Private Enterprises that "profit-making economic organizations with more than 8 employees are private enterprises", there is no scientific basis, and the Law on Sole proprietorship Enterprises does not clearly stipulate it. Therefore, the number of employees can't be used as the measurement standard of a sole proprietorship enterprise, but the "necessary employees" still need to be explained by the relevant authorities before judicial practice can have operational standards. Two. Civil liability stipulated in the Law on Sole proprietorship Enterprises (I) Civil liability of sole proprietorship enterprises A sole proprietorship enterprise determines that the law regards the personality of the owner and its sole proprietorship enterprise as a whole [6](p283), but after all, the sole proprietorship enterprise and its owner cannot be equated. As an investor, he has a fixed amount of property to invest in a sole proprietorship enterprise. According to the provisions of the law on sole proprietorship enterprises, he declared and made clear the amount of capital contribution when setting up a sole proprietorship enterprise, which can be used as the registered capital of the sole proprietorship enterprise. His investment can be all his property or part of his personal property; The income of his sole proprietorship enterprise is not necessarily all his income. Therefore, the personality of the owner and the personality of the sole proprietorship enterprise can only be regarded as a whole, but not as an equal sign between them. For a sole proprietorship enterprise, its property is relatively fixed, which is different from the owner's personal property, that is, the investor's investment and the income of the sole proprietorship enterprise are the property of the sole proprietorship enterprise. Therefore, a sole proprietorship enterprise shall pay off all the property of the enterprise when it is liable for its debts. If it is insufficient to pay off, the investor shall pay off the debt with other personal property. In fact, a sole proprietorship enterprise itself is an unincorporated organization, and it has no property of its own. The property of a sole proprietorship enterprise is the property of the investor (owner). It is better for investors (owners) to bear civil liability than for sole proprietorship enterprises. It is only a habit for a sole proprietorship enterprise to bear civil liability. The author will not repeat this point in the following narrative. When a sole proprietorship enterprise is dissolved, its property shall be used to pay off the debts of the enterprise in the following order: (1) wages and social insurance premiums owed to employees; (2) Tax owed; (3) Other debts. If the previous order is not paid off, the latter order will not be paid off; In the same order, pay off in proportion; If it is insufficient to pay off, the investor shall pay off with other personal property. According to Article 14 of the Law on Sole proprietorship, a sole proprietorship enterprise may set up a branch, and the civil liability of the branch shall be borne by the sole proprietorship enterprise that set up the branch. (II) Investor's "Unlimited Liability" The investor's unlimited liability for the debts of a sole proprietorship enterprise is a distinctive feature of the sole proprietorship enterprise and a common practice in legislation in various countries. Its unlimited liability means that when the property of a sole proprietorship enterprise is insufficient to pay off the debts of the enterprise, the investor pays off the debts with other personal property until it is fully paid off. If you can't pay it off completely, the individual will go bankrupt. At present, China does not implement the personal bankruptcy system. If personal property is still not enough to pay off, and it cannot be paid off in the future, it will become an unenforceable "dead debt" and is often exempted from the responsibility of paying off. However, in China's judicial practice, family-run enterprises should bear the responsibility of paying off debts with family-owned property. However, the provisions of Article 18 of the Law on Sole proprietorship enterprises are different. Only when "the investor clearly uses the property owned by his family as his personal contribution when applying for the registration of enterprise establishment" can he "assume unlimited liability for the debts of the enterprise with the property owned by his family". This is limited by time and form. In terms of time, it is limited to applying for enterprise registration, rather than family business in the actual sense afterwards. Formally, it is limited to clearly taking family property as personal property, and the clear way is usually stated in the application form for the establishment of a sole proprietorship enterprise or related supporting documents. If you can't provide the exact proof that the family property is a personal contribution, the judicial organ can't use the family property to pay off the debts of the sole proprietorship enterprise when handling disputes. In other words, attention should be paid to the scope of unlimited liability with personal property, and unlimited personal liability cannot be assumed. Investors' unlimited liability for corporate debts is also reflected in the dissolution and liquidation of enterprises. Article 30 of the sole proprietorship enterprise law stipulates that during the liquidation period, "investors shall not transfer or conceal their property before paying off their debts in the legal order." Article 42 stipulates: "If a sole proprietorship enterprise and its investors conceal or transfer property before or during liquidation and evade debts, their property shall be recovered according to law and punished in accordance with relevant regulations; If it constitutes a crime, criminal responsibility shall be investigated according to law. " Even after the dissolution of the enterprise, investors still bear unlimited repayment responsibilities under certain conditions. Article 28 of the law stipulates: "After the dissolution of a sole proprietorship enterprise, the original investor is still liable for paying off the debts of the sole proprietorship enterprise during its existence, but if the creditor fails to recover from the debtor within five years, the liability shall be extinguished." Here, "if the creditor fails to make a repayment request to the debtor within five years, the debt will be extinguished" shall be the period during which the creditor exercises his rights. It seems inappropriate to use the phrase "responsibility should be eliminated". In the legal liability of investors' property, there are also conflicts and coordination problems between civil liability and administrative liability and criminal liability. Investors' property is limited. If there are both civil liability for compensation and administrative and criminal liability for fines, fines or confiscation of property, what should be done? Article 43 of the sole proprietorship enterprise law stipulates: "Investors who violate the provisions of this law shall bear civil liability for compensation and pay late fees and fines. If his property is insufficient to pay, or if he is sentenced to confiscation of property, he shall bear civil liability for compensation first. " This establishes the principle that the civil liability of investors' property legal liability takes precedence. According to this principle, when the property of the investor is sufficient to bear all kinds of legal responsibilities, it should be borne alone; When it is not enough to bear all kinds of legal responsibilities, it will give priority to civil liability. If different judicial organs make separate rulings on the legal liability of investors' property, it should also be handled in accordance with this principle. Even if an administrative or criminal ruling is made first, the interests of civil creditors cannot be ignored. The organ dealing with civil economic disputes may coordinate with other judicial organs according to the provisions of this article, and bear civil liability for compensation in advance with the personal property of investors. (three) the civil liability of the personnel entrusted or hired to manage enterprise affairs. Sole proprietorship enterprises are generally larger than individual industrial and commercial households, and some have set up branches in other places. For the needs of production and operation, investors often entrust or hire others to manage enterprise affairs. According to the third paragraph of article 19 of the law on sole proprietorship enterprises, "the entrusted or hired personnel shall perform the obligations of honesty and diligence in accordance with the contracts signed with investors and be responsible for the affairs management of sole proprietorship enterprises." Article 20 of the law stipulates: "The personnel entrusted or hired by investors to manage the affairs of a sole proprietorship enterprise shall not commit the following acts: (1) taking advantage of their positions to ask for or accept bribes; (2) taking advantage of his position or work to occupy the property of the enterprise; (3) misappropriating enterprise funds for personal use or lending them to others. (4) Opening an account for enterprise funds in the name of an individual or in the name of others without authorization; (5) Providing guarantee with enterprise property without authorization; (6) engaging in business that is competitive with the enterprise without the consent of the investor; (seven) without the consent of the investor, enter into a contract or conduct a transaction with the enterprise; (8) Transferring enterprise trademarks or other intellectual property rights to others without the consent of investors; (9) divulging the business secrets of the enterprise; (10) Other acts prohibited by laws and administrative regulations. " Then, if the person entrusted or employed to manage enterprise affairs violates contractual obligations and engages in acts prohibited by law, thus causing damage to investors and sole proprietorship enterprises, how can he bear civil liability? The Law on Sole Proprietary Enterprises has made two provisions in the chapter of legal liability. First, the liability of the trustee or employee for breach of contract. Article 38 of the law stipulates: "If the personnel entrusted or hired by the investor to manage the affairs of a sole proprietorship enterprise violate the contract concluded by both parties and cause damage to the investor, they shall bear civil liability for compensation." The liability stipulated in this article belongs to the liability for breach of contract, but the liability for breach of contract is conditional: first, it violates the contract concluded with investors to manage enterprise affairs; The second is the behavior of managing enterprise affairs; The third is to cause damage to investors. The three conditions must be met at the same time, otherwise the trustee or employee will not be liable for damages for breach of contract. The second is the responsibility of the trustee or employee for infringing the property rights and interests of the enterprise. In the management of enterprise affairs, it happens from time to time that trustees and employees take advantage of their positions or jobs to occupy enterprise property or interests. For this reason, Article 46 of the Law stipulates: "If the personnel entrusted or hired by the investor violate the provisions of Article 20 of this Law and infringe upon the property rights and interests of the sole proprietorship enterprise, they shall be ordered to return the encroached property; If losses are caused to the enterprise, it shall be liable for compensation according to law; Illegal income, confiscate the illegal income; If it constitutes a crime, criminal responsibility shall be investigated according to law. " The ways of civil liability stipulated in this article are refund and compensation. When the property or interests of the enterprise still exist, it shall be ordered to return them; However, if the property or interests no longer exist, the liability method of compensation for losses should be adopted; If there are other losses after the property is returned, it can be used together with the liability method for compensation for losses. In addition, Article 40 of the Law "If there are illegal gains, the illegal gains shall be confiscated; If it constitutes a crime, criminal responsibility shall be investigated according to law ",and there is no conflict and coordination between civil responsibility and administrative responsibility and criminal responsibility as stipulated in Article 43. In my opinion, the provisions of article 43 cannot be applied. Because the civil liability of investors is generally external to the enterprise, the law should fully protect the interests of creditors. Under the condition of market economy, the priority of civil creditor's rights is conducive to the development of market economy, and China's legislative value orientation also conforms to the world trend, which is a reflection of the change from national standard to individual standard. However, the relationship between the trustee or employee and the investor is the relationship within the enterprise. If the trustee or employee engages in illegal and criminal acts by taking advantage of the management of enterprise affairs, the investor shall bear the supervision responsibility. It is appropriate for investors to bear the adverse legal consequences caused by this, which is conducive to the scientific management of enterprises and the improvement of market economic order. Investors have no right to recover losses from the trustee or employee because of the criminal liability of the trustee or employee. Even if a civil lawsuit is filed, the court should not support it.