Chapter 2Forms of Business
Chapter 2 Forms of Business
LearningobjectivesOncompletionofthischapter,studentsshouldbeableto:Knowsomeusualformsofbusiness,Explainlegaltermssuchasliabilityandlegalperson,Understandtheconceptsofunincorporatedandincorporatedbusinessforms,HaveageneralunderstandingofvariousformsofenterprisesinChina
Learning objectives On completion of this chapter, students should be able to: ⚫Know some usual forms of business, ⚫Explain legal terms such as liability and legal person, ⚫Understand the concepts of unincorporated and incorporated business forms， ⚫Have a general understanding of various forms of enterprises in China
Contents2.1“Persons"inlaw。2.2BusinessOperationForms2.3ThePresenceofBusinessEntitiesinChina
Contents ◦ 2.1 “Persons” in law ◦ 2.2 Business Operation Forms ◦ 2.3 The Presence of Business Entities in China
ENTREPRENEURChoosingaFormofBusinessSELF-EMPLOYEDOneofthemost important decisionsmadebyapersonbeginninga1BUSINESS OWNERbusinessischoosingaformofbusiness.YOUR OWN BoSyThisdecisionis importantbecausethebusinessowner'sliabilityandcontrolofthebusinessvarygreatlyamongthemanyformsofbusiness.Enterprise。Businessentity。Partnership。Company。Corporation。Co.LLC,CLSWHAAAAAAT?GPSP
Choosing a Form of Business ◦ One of the most important decisions made by a person beginning a business is choosing a form of business. ◦ This decision is important because the business owner’s liability and control of the business vary greatly among the many forms of business. ◦ Enterprise ◦ Business entity ◦ Partnership ◦ Company ◦ Corporation ◦ Co. ◦ LLC,CLS ◦ GP,SP ◦
fuKMIKMI International Corp.AppleInc.plusfu co.,Itd.Co.,Ltd./Ltd/LLC=CompanyLimited有限责任公司Corp.=Corporation，ingeneralitmeanscompany泛指“公司"Inc.=Incorporated
Co., Ltd./Ltd/LLC = Company Limited 有限责任公司 Corp. = Corporation , in general it means company泛指“公司” Inc. = Incorporated
2.1“Persons"inlaw2.1.1Natural Person2.1.2LegalPerson
2.1 “Persons” in law 2.1.1 Natural Person 2.1.2 Legal Person
2.1.1NaturalPersonWhatisa natural person?Anatural person refers toaphysicalperson,orahumanbeing,whoisapersoncapable of holding rights and capable ofassuming obligations underthelaw.Natural persons acquire legal personality"naturally", simply by being born in mostjurisdictions
2.1.1 Natural Person What is a natural person? ◦ A natural person refers to a physical person, or a human being, who is a person capable of holding rights and capable of assuming obligations under the law. ◦ Natural persons acquire legal personality "naturally", simply by being born in most jurisdictions
LegalCapacityofaNaturalPersonWhatislegal capacity?Legalcapacity,whichcouldbedefinedasthecapabilityandpowerunderthelawofapersontooccupyaparticularstatusorrelationshipwithanotherortoengage in aparticular undertaking ortransaction.Inotherwords,it istheabilityof apersontomakelegallyvaliddecisionsandto enterintobinding contractual relations.Importanceoflegal capacityItmakesapersonasubjectof lawandaholderof legal rights andobligationsLegal capacityisparticularlyimportantbecauseitaffectsallareasoflife,fromchoosingwheretolive,andwhether andwhomtomarry,tosigninganemploymentcontract,etc
Legal Capacity of a Natural Person What is legal capacity? ◦ Legal capacity, which could be defined as the capability and power under the law of a person to occupy a particular status or relationship with another or to engage in a particular undertaking or transaction. ◦ In other words, it is the ability of a person to make legally valid decisions and to enter into binding contractual relations. Importance of legal capacity ◦ It makes a person a subject of law and a holder of legal rights and obligations. ◦ Legal capacity is particularly important because it affects all areas of life, from choosing where to live, and whether and whom to marry, to signing an employment contract, etc
Twoaspectsoflegal capacityThe legal capacitycould bedivided into twoaspectsCapacityforcivilrightsCapacityforcivilconduct
Two aspects of legal capacity The legal capacity could be divided into two aspects, ◦ Capacity for civil rights ◦ Capacity for civil conduct
(1)CapacityforCivilRightsWhatisCapacityforCivilRights?Capacityfor civil rights isthe abilityforanindividual to enjoy civil rights,whichisrecognizedtoall personsregardlessofrace,ethnic origin,language,religion, sex, social wealth, degree of culture, or other similar criteria.。Forexample,toenjoythe rights of life,real rights(物权),and creditor'srightsWhenaperson cangetthecapacityforcivil rights?AccordingtotheCivilCodeofthePRC,anaturalpersonhasthecapacityforcivil rights from themoment ofbirthto themoment of death, enjoying civilrightsand assumingcivilobligations inaccordancewiththelaw.All naturalpersons areequal incapacityforcivilrights
(1) Capacity for Civil Rights What is Capacity for Civil Rights? ◦ Capacity for civil rights is the ability for an individual to enjoy civil rights, which is recognized to all persons regardless of race, ethnic origin, language, religion, sex, social wealth, degree of culture, or other similar criteria. ◦ For example, to enjoy the rights of life, real rights(物权), and creditor's rights. When a person can get the capacity for civil rights? ◦ According to the Civil Code of the PRC, a natural person has the capacity for civil rights from the moment of birth to the moment of death, enjoying civil rights and assuming civil obligations in accordance with the law. All natural persons are equal in capacity for civil rights