Private Law Entities in China

Private Law Entities in China

Since the entry into force of the General Part of the Civil Code in 2017, Chinese law has divided private law entities into profit-oriented and non-profit organisations.

On one side we find as the prototype a corporate entity constituted in the form of a limited liability company whose organizational structure will, starting in 2020, be available for businesses established in China by foreign investors. On the other side, there exist associations and foundations constituted under Chinese law, entities which can be found also in other jurisdictions like Germany. But also newly added to the category of non-profit organisations are “social service organs” and “venues for holding religious activities”, entities that are arguably unparalleled in other jurisdictions.

This very modern classification of private law entities raises a number of research questions that are being pursued by the Centre of Expertise on China:

Can Chinese company law, which was initially established for the purpose of reorganising state-owned companies, effectively regulate the conflicts of interest that arise in modern corporations?

What role is to be played by nonprofit organisations in a political system that continues to have the nature of a centralized, socialist party dictatorship?

How do the new legal forms of “social service organs” and “venues for holding religious activities” fit into this system? Are there functional equivalents in other legal systems?


Katja Levy, Knut Benjamin Pißler, Charity with Chinese Characteristics – Chinese Charitable Foundations between the Party-state and Society, Elgar, Cheltenham 2020, 320 pp.
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