I. Various types of business establishment in Beijing [http://www.chinacarveout.com]
(a) Sole proprietorship;
(b) Partnership;
(c) Limited liability company.
II. Differences between enterprises and individual businesses.
(a) What are the differences between individual businesses and limited companies?
A limited company bears responsibility for its debts with all its assets, while shareholders bear corresponding responsibilities according to their capital contributions. Individual businesses bear unlimited responsibility for debts and do not have legal person status. Limited companies possess legal person status.
(b) Differences between individual businesses and sole proprietorships?
Individual businesses can be established by a single natural person or a family collectively. Sole proprietorships can only be established by one natural person. Individual businesses bear unlimited liability for debt repayment; if it is an individual operation, personal property is used; if it is a family operation, family property is used. In general, the investor of a sole proprietorship only bears unlimited responsibility for enterprise debts with their personal property.
III. Differences between sole proprietorships and one-person limited liability companies.
Sole proprietorships are business entities where the investor bears unlimited responsibility for enterprise debts with their personal property. Sole proprietorships do not possess legal person status [http://www.chinacarveout.com]. One-person limited companies bear responsibility for company debts according to the shareholder's capital contribution. One-person limited companies possess legal person status. The investor of a sole proprietorship can only be one natural person; a one-person limited company can be invested in by one natural person shareholder or one legal entity shareholder.
IV. Differences between partnership enterprises and limited liability companies.
Partnership enterprises and limited liability companies are two different organizational forms of enterprises. First, partnership enterprises are contractual enterprises, while limited companies are equity-based enterprises. Second, partnership enterprises do not possess legal person status, whereas limited companies do. Third, there are differences in responsibility-bearing between partnership enterprises and limited companies: partnership enterprises bear unlimited responsibility for enterprise debts, while limited companies bear responsibility for company debts according to the shareholders' capital contributions.
V. Differences between limited liability companies and joint-stock companies.
First, different registered capital requirements; the minimum registered capital limit for limited liability companies is RMB 30,000; for joint-stock companies, it is RMB 5 million.
Second, different numbers of shareholders; limited liability companies are established by less than fifty shareholders. Joint-stock companies should have between two and two hundred initiators.
Third, different ways of raising funds by initiators; for the two modes of establishment—initiation establishment and public offering establishment—limited liability companies can only use the former, while joint-stock companies can choose either.
VI. Conditions required for the registration of business licenses.
(a) Conditions required for registering a sole proprietorship business license.
1. The investor must be a natural person;
2. There must be a lawful enterprise name;
3. There must be capital contributions declared by the investor;
4. There must be a fixed place of production and operation and necessary conditions for production and operation;
5. There must be necessary employees;
6. If the declared business projects require prior approval, relevant licenses should be provided.
(b) Conditions required for registering a partnership enterprise business license.
1. There must be more than two partners, all of whom are legally responsible for unlimited liability;
2. There must be a written partnership agreement;
3. There must be actual capital contributions from each partner;
4. There must be a name for the partnership enterprise;
5. There must be a business location and necessary conditions for partnership operations;
6. If the declared business projects require prior approval, relevant licenses should be provided.
(c) Conditions required for registering a limited liability company business license.
According to the latest Company Law, the registration of a limited liability company should meet the following conditions:
1. The number of shareholders must comply with legal requirements; generally, the number of shareholders in a limited liability company is limited to between two and fifty; for a one-person limited liability company, the shareholder is limited to one natural person or one legal entity.
2. The capital contributions of shareholders must reach the statutory minimum capital limit; the initial capital contribution of all shareholders shall not be less than 20% of the company's registered capital and shall not be less than the statutory minimum registered capital. The remaining part shall be paid up within two years from the date of establishment of the company; investment companies can pay up within five years. The minimum registered capital for a general limited liability company is RMB 30,000; for a one-person limited liability company, the minimum registered capital is RMB 100,000, and it must be fully paid at once, not in installments. Note: For specific industries, the minimum registered capital limit for limited liability companies must be higher than the above limits as stipulated by laws and administrative regulations (for example, auction industries require at least RMB 1 million registered capital; pawnshops require at least RMB 3 million registered capital).
3. Shareholders jointly formulate the articles of association; formulating the articles of association for a limited liability company is an important step in establishing a company. The articles of association are formulated on the basis of voluntary negotiation among all investors and agreed upon by all investors. Shareholders should sign and affix seals on the articles of association.
4. There must be a company name and an organizational structure that meets the requirements of a limited liability company; in addition to meeting the general provisions for corporate names, the name of a limited liability company must indicate "limited liability company" or "limited company." Establishing an organizational structure that meets the requirements of a limited liability company generally refers to the shareholders' meeting, board of directors, board of supervisors, manager, or shareholders' meeting, executive director, one to two supervisors, and manager. The former applies when there are more shareholders and the company is larger, while the latter applies otherwise.
5. There must be a company address; there must be a fixed place of production and operation and necessary conditions for production and operation.
6. If the declared business projects require prior approval, relevant licenses should be provided.
VII. Basic procedures for handling business licenses.
Response: (a) Basic procedures for setting up a sole proprietorship business license.
1. Apply for pre-approval of the name, i.e., apply for the enterprise name.
2. The investor or their authorized agent collects the sole proprietorship enterprise establishment registration form from the registration authority at the enterprise's location and submits the following documents:
(1) Sole proprietorship enterprise establishment application signed by the investor;
(2) Investor's identity proof;
(3) Enterprise residence proof;
(4) If the declared business projects require prior approval, provide relevant licenses or other files specified by the State Administration for Industry and Commerce;
(5) Proof of designated representative or common agent appointed by the investor;
(6) Enterprise name pre-approval notice.
(b) Basic procedures for setting up a partnership enterprise.
1. Apply for pre-approval of the name, i.e., apply for the enterprise name.
2. The partner or their jointly appointed agent collects the partnership enterprise establishment registration form from the registration authority at the enterprise's location and submits the following documents:
(1) Partnership enterprise establishment application signed by all partners;
(2) Identity proofs of all partners;
(3) Enterprise residence proof;
(4) If the declared business projects require prior approval, provide relevant licenses or other files specified by the State Administration for Industry and Commerce;
(5) Proof of designated representative or common agent appointed by all partners;
(6) Enterprise name pre-approval notice;
(7) Partnership agreement;
(8) Letter of authorization from all partners to execute partnership affairs.
(c) Basic procedures for setting up a limited company.
1. Apply for pre-approval of the name, i.e., apply for the enterprise name.
2. All shareholders or their appointed agents collect the limited company establishment registration form from the registration authority at the enterprise's location and submit the following documents:
(1) Limited company establishment application signed by the company's legal representative;
(2) Identity proofs of all shareholders;
(3) Enterprise residence proof;
(4) If the declared business projects require prior approval, provide relevant licenses or other files specified by the State Administration for Industry and Commerce;
(5) Proof of designated representative or common agent appointed by all shareholders;
(6) Enterprise name pre-approval notice;
(7) Articles of association signed by all shareholders;
(8) Capital verification report issued by an accounting firm.