General Partnership (GP)
General Partnership Setup
Looking to establish a company in China? Our expert guide covers steps, benefits, limitations, and costs.
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What is General Partnership ?
A General Partnership is a business entity established under the Partnership Enterprise Law of the People’s Republic of China (latest revision 2017).
It is formed by two or more partners who jointly invest, operate, and share profits — while bearing unlimited and joint liability for the partnership’s debts.This structure is simple, flexible, and favored for consulting, professional services, and small business ventures.
Unlike an LLC, a partnership is not a separate legal person, but it is recognized as an independent tax-paying business entity.
Clear Ownership transparency
Simple governance
Tax transparency
Quick establishment
WFOE? Not Anymore!
With the implementation of the Foreign Investment Law of the PRC, all foreign-invested enterprises are now governed by the unified Partnership Enterprise Law, meaning that traditional structures such as WFOE (Wholly Foreign-Owned Enterprise) and JV (Joint Venture) have been integrated into the new framework:
A former WFOE is now legally a Limited Liability Company with 100% foreign ownership.
A former JV (equity or cooperative) is now either an LLC or JSC, depending on its shareholding structure.
Why Choose General Partnership?
Choosing a General Partnership offers maximum flexibility and minimal administrative burden, ideal for small-scale ventures and service-based firms.
Low setup threshold
No registered capital requirement
Simple governance
Partners directly manage business affairs
Tax transparency
Profits are taxed at the partner level
Flexible profit distribution
Decided by partnership agreement
Quick establishment
Fewer filings and faster approval process
Ideal for professionals
Commonly used for law firms, studios, and consulting practices
Who Should Consider General Partnership ?
A General Partnership is suitable for investors who value operational control, flexibility, and simple compliance rather than limited liability.
Service Firms
Perfect for consulting, legal, accounting, and creative firms that rely on professional expertise and shared management.
Small Ventures
A great fit for small-scale operations seeking quick setup, minimal regulation, and straightforward tax filing.
Professional Practices
Ideal for specialists—lawyers, designers, engineers—who want shared ownership and flexible profit distribution.
Joint Investors
Suitable for domestic or foreign partners working together under a single agreement without forming a corporation
China General Partnership Registration Procedure
1. Preparation
Define the partnership structure and draft a clear agreement.
- Confirm at least two partners (natural or legal persons)
- Determine profit-sharing and contribution ratios
- Choose business scope and name
2. Partnership Agreement
Draft and sign a legally binding partnership agreement specifying rights and obligations.
- Partner names, contributions, and management rights
- Profit/loss distribution and withdrawal mechanism
- Dispute resolution and dissolution clauses
3. Registration
Apply with the AMR to obtain your Business License, the legal confirmation of establishment.
- Submit application and agreement
- Obtain Business License
- Register business seal (optional)
4. Post-Registration Filings
Register for taxation and open a business account.
Timeline
Partnership Planning
Agree on the partnership’s purpose, contribution, profit-sharing ratio, and management rules.
- Estimated time: 1–2 weeks
Registration & Filing
Submit the partnership application to the Administration and complete necessary filings.
- Estimated time: 2–3 weeks
Post-Registration Setup
Establish tax records, open a business bank account, and begin operations. Tax registration and filing setup
- Estimated time: 2–3 weeks
Basic Documents required for General Partnership
1. Foundational Records
- Partnership name approval notice
- Partner ID or business license
- Registered address certificate
2. Governance Records
- Partnership agreement
- Partner resolutions
- Executive partner appointment
3. Financial Records
- Tax registration certificate
- Bank account certificate
- Accounting and filing records
WHAT DO YOU GET
Business License
Issued by AMR confirming partnership registration
Partnership Agreement
Defines rights, obligations, and profit-sharing rules
Registered Partner List
Official record of all partners filed with AMR
Tax Registration Certificate
Allows the partnership to declare income and pay taxes
Bank Account Setup
For daily financial transactions and capital management
Compliance Records
Proof of registration and post-filing compliance
All-In-One GP Entry Package
Our General Partnership Package helps foreign investors establish a fully independent legal entity in China.
Under the 2023 Company Law, a General Partnership enables shareholding, capital raising, and long-term operations with transparent governance and full regulatory compliance.
General Partnership Registration
General Partnership registration securing your business certificate, registered address and bank accounts.
Tax & Accounting Compliance
China accounting system setup. Monthly, quarterly & yearly reporting. Corporate annual tax return.
Employer of Record
We take care of contracts, payroll, benefits, and HR administration.
General Partnership FAQs
What is a general partnership in China?
A general partnership is a business jointly established by two or more partners who share profits and bear unlimited joint liability for its debts, under the Partnership Enterprise Law of the PRC
What law governs general partnerships in China?
A company whose capital is divided into equal shares; shareholders have limited liability to the amount subscribed. It offers stronger fundraising and equity-transfer mechanics than an LLC.
What is the difference between a general and limited partnership?
n a general partnership, all partners share unlimited liability.
In a limited partnership, at least one partner has unlimited liability and others are liable only to their contributions.
How many partners are required to form a general partnership?
At least two partners (individuals or legal entities) are required.
There is no maximum limit under current Chinese law.
Is a general partnership a legal entity?
It is not a separate legal person, but it can conduct business, own assets, and enter contracts in its registered name.
What are the advantages of a general partnership?
- No minimum capital requirement
- Easy formation and management
- Flexible profit distribution
- Direct control by partners
- Transparent taxation at the partner level
What are the disadvantages of a general partnership?
- Unlimited liability for debts
- Greater personal financial exposure
- Not suitable for high-risk or capital-intensive industries
How is profit shared in a general partnership?
Profit and loss distribution follow the partnership agreement.
It doesn’t have to match capital contributions — flexibility is allowed.
Can a general partnership employ staff?
Yes. Once the partnership completes tax and social insurance registration, it can hire employees directly.
Can foreign investors form a general partnership in China?
Yes. Under the 2010 Administrative Measures for Foreign Enterprises or Individuals Establishing Partnerships in China, foreign investors can form partnerships with Chinese or foreign partners.
What documents are required to register a general partnership?
- Signed partnership agreement
- Partner ID or business license copies
- Registered address certificate
- Application form submitted to AMR
What is the tax treatment for a general partnership?
A partnership itself is not taxed on profits; instead, each partner pays Individual Income Tax (IIT) or Enterprise Income Tax (EIT) on their share of earnings.
Who is liable for the debts of a general partnership?
All partners are jointly and severally liable for the partnership’s debts.
If one partner pays, they can seek reimbursement from others.
Can a general partnership be converted into an LLC?
Yes, partners can convert the business into a Limited Liability Company through unanimous consent and re-registration with the AMR.
How is a general partnership dissolved?
It may dissolve by:
- Agreement among all partners
- Expiry of partnership term
- Withdrawal of all partners
- Bankruptcy or legal order
What is an example of a general partnership in China?
Examples include law firms, accounting firms, consulting agencies, and creative studios jointly owned and managed by professionals.