Page 208 - 2021 White Paper
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1 White Paper on the Business Environment in China
company is a non-legal person organization and Law, Article 2938, is extended to all partnerships
thus does not have the status of a legal person, pursuant to the Civil Code.
but it may engage in civil activities in its own
name35. The chapter on contracts adjusted the The Civil Code, Article 972, provides for sharing
legal relations of a civil partnership, highlighting profits and losses. Article 973 provides for debt
that an internal relation of a partnership is subject obligations. Article 974 regulates the transfer
to a general provisions for the legal relationship of of shares of partnership property. Article 975
the partnership. The Partnership Law, on the other provides restrictions on the exercise of the right
hand, fully provides for the rules of internal and of subrogation by creditors. The said Articles
external relations of the partnership, which is a respectively correspond to Articles 30, 38, 39, 40
special provision for commercial partnerships. and 41 in the Partnership Law, which are extended
to all partnerships in the partnership system.
The Civil Code provides that prior to the
termination of a partnership contract, a partner The previous General Principles of Civil Law
may not divide partnership property36. Partnership did not specify how to deal with the expiration
property is common property, jointly managed of the partnership. The Partnership Law, Article
and employed by the partners. However, this 46 provides that “where the term of partnership
chapter only provides general provisions of is not specified in a partnership agreement, a
the partnership, while the Partnership Law has partner may withdraw from the partnership by an
specific provisions for commercial partnerships advance 30-day notice to other partners, provided
which provide that the partnership company that its withdrawal will not cause adverse effect on
shall not divide its partnership property prior to the operation of the partnership affairs.” If there
liquidation37. is no agreement on the term of the partnership,
or the term of the partnership is undefined, it
Article 970 of the Civil Code, based on Article shall be deemed as a partnership at will, and a
34 of the General Principles of the Civil Law, fully partner shall be granted the right to terminate
elaborates on undertaking partnership affairs. the contract; however, the partner shall notify
First, the partnership affairs decisions shall follow the other partners of its termination of a contract
the principle of unanimous consent, unless of partnership at will, at a reasonable time in
otherwise agreed to the partnership contract. advance39. These provisions in the Civil Code are
Second, in principle, partnership affairs shall be similar to those in the Swiss Code of Obligations and
jointly executed by all partners. Third, this Article the “Civil Law” of Taiwan.
established a system for partnership affairs
undertaken by entrusted partners. Fourth, it 2. Personality Rights
adds a partner objection system. Any partners
who execute partnership affairs believing that The system of personality rights is composed as
the execution by other partners is improper and a separate chapter, Chapter Four in the Civil Code,
may damage the interests of the partnership which is new. Chapter Four, regarding personality
may raise objections, and other partners should rights, consists of 6 subchapters and 51 articles.
suspend such partnership acts. “Objections” This Chapter provides for the type, content,
means a partner may express opposition to boundary and protection of the personality rights
specific conduct of other partners, rather than
dissatisfaction with the matter executed by other 38 Partnership Law, Article 29 reads: if each partner may
partners. Whether the execution of such acts separately execute the partnership affairs, and the part-
should be suspended, depends on the unanimous ners executing the partners may raise objections to the af-
decision of all partners. The objection system, fairs executed by other partners. When raising objections,
which was previously set forth in the Partnership the execution of such affairs shall be suspended. If any
dispute arises, a decision shall be made in accordance
35 Civil Code, Article 102 with Article 30 of this Law. Where a partner entrusted to
36 Civil Code, Article 969 (2) execute the partnership affairs fails to execute according
37 Partnership Law, Article 21 (1) to the partnership agreement or decision of all partners,
the other partners may decide to revoke the entrustment.
39 Civil Code, Article 976
208
company is a non-legal person organization and Law, Article 2938, is extended to all partnerships
thus does not have the status of a legal person, pursuant to the Civil Code.
but it may engage in civil activities in its own
name35. The chapter on contracts adjusted the The Civil Code, Article 972, provides for sharing
legal relations of a civil partnership, highlighting profits and losses. Article 973 provides for debt
that an internal relation of a partnership is subject obligations. Article 974 regulates the transfer
to a general provisions for the legal relationship of of shares of partnership property. Article 975
the partnership. The Partnership Law, on the other provides restrictions on the exercise of the right
hand, fully provides for the rules of internal and of subrogation by creditors. The said Articles
external relations of the partnership, which is a respectively correspond to Articles 30, 38, 39, 40
special provision for commercial partnerships. and 41 in the Partnership Law, which are extended
to all partnerships in the partnership system.
The Civil Code provides that prior to the
termination of a partnership contract, a partner The previous General Principles of Civil Law
may not divide partnership property36. Partnership did not specify how to deal with the expiration
property is common property, jointly managed of the partnership. The Partnership Law, Article
and employed by the partners. However, this 46 provides that “where the term of partnership
chapter only provides general provisions of is not specified in a partnership agreement, a
the partnership, while the Partnership Law has partner may withdraw from the partnership by an
specific provisions for commercial partnerships advance 30-day notice to other partners, provided
which provide that the partnership company that its withdrawal will not cause adverse effect on
shall not divide its partnership property prior to the operation of the partnership affairs.” If there
liquidation37. is no agreement on the term of the partnership,
or the term of the partnership is undefined, it
Article 970 of the Civil Code, based on Article shall be deemed as a partnership at will, and a
34 of the General Principles of the Civil Law, fully partner shall be granted the right to terminate
elaborates on undertaking partnership affairs. the contract; however, the partner shall notify
First, the partnership affairs decisions shall follow the other partners of its termination of a contract
the principle of unanimous consent, unless of partnership at will, at a reasonable time in
otherwise agreed to the partnership contract. advance39. These provisions in the Civil Code are
Second, in principle, partnership affairs shall be similar to those in the Swiss Code of Obligations and
jointly executed by all partners. Third, this Article the “Civil Law” of Taiwan.
established a system for partnership affairs
undertaken by entrusted partners. Fourth, it 2. Personality Rights
adds a partner objection system. Any partners
who execute partnership affairs believing that The system of personality rights is composed as
the execution by other partners is improper and a separate chapter, Chapter Four in the Civil Code,
may damage the interests of the partnership which is new. Chapter Four, regarding personality
may raise objections, and other partners should rights, consists of 6 subchapters and 51 articles.
suspend such partnership acts. “Objections” This Chapter provides for the type, content,
means a partner may express opposition to boundary and protection of the personality rights
specific conduct of other partners, rather than
dissatisfaction with the matter executed by other 38 Partnership Law, Article 29 reads: if each partner may
partners. Whether the execution of such acts separately execute the partnership affairs, and the part-
should be suspended, depends on the unanimous ners executing the partners may raise objections to the af-
decision of all partners. The objection system, fairs executed by other partners. When raising objections,
which was previously set forth in the Partnership the execution of such affairs shall be suspended. If any
dispute arises, a decision shall be made in accordance
35 Civil Code, Article 102 with Article 30 of this Law. Where a partner entrusted to
36 Civil Code, Article 969 (2) execute the partnership affairs fails to execute according
37 Partnership Law, Article 21 (1) to the partnership agreement or decision of all partners,
the other partners may decide to revoke the entrustment.
39 Civil Code, Article 976
208
