Transitional Arrangement Of China LLC's Legal System By Weighing The Pros And Cons Of The USA LLC

The Limited Liability Company (hereinafter referred to as the"LLC") is not originated while fully developed in the United States of America (hereinafter referred to as the"U.S."), where it is widely adopted in the 1990s. For the purpose of getting rid of its traditional disadvantage, expanding autonomy and preventing the double taxation stipulated in the Internal Revenue Code, the LLC, as a new form of business organization, integrates the limited liability and flexible management system with the non-double taxation treatment, of which the origin and development has a great influence on all the U.S. enterprises, especially on the small and medium-sized enterprises. The LLC also attracts attention of Scholars in China, however, with little research production. The research concerning the LLC in China focus on the following aspects: Whether the LLC introduced to China is legally feasible? If it is, what are the problems and their corresponding solutions; and if it is not, what are the alternatives? Considering the current legal system in China, this dissertation tries to discuss these problems and present a proposal for the improvement on forms of business organization in China.Except of introductory part and conclusion,the paper consists of three parts as follow:Partâ… briefly introduces the concept and legal characteristics of LLC. First point introduces the background and development; Second one introduces its legal system, including the establishment, operation, the withdrawal of members, dissolution of the system; Again,based upon the previous, three legal characteristics of LLC enjoys limited liability of members, flexible management system and mechanism, non-double tax treatment.Partâ…¡weighs the pros and cons of LLC from China's perspective. First one compares the value of LLC with China's sole proprietorship, limited partnership, limited liability partnership and limited liability corporation; Second one introduces disadvantages of LLC, including the limitations applicable to the object, infringement of third-party; Finally, based on our current theory, practice and system requirements, and the balance about pros and cons of LLC, LLC come to our reference system, more good than harm.Partâ…¢dedicates to improve China's enterprise system by the drawing on the value of LLC and, ultimately, to develop our "Limited Liability Company Act". First of all, make the introduction of transitional arrangements of LLC, including the gradual elimination of double tax treatment, the full expansion of enterprise autonomy, the improvment of corporate governance and more protection of third-party. Secondly, develop our "Limited Liability Company Act" which devotes to the market, investors, and third-party. At last, the paper put forward five aspects of the legislative proposals, requiring liberal capital system, full of limited liability, flexible management, more protection of third-party and non-double tax treatment.