Point of View... Analysis of the legal relationship of partnership.

Article 967 of the the People's Republic of China Civil Code states that "a partnership contract is an agreement between two or more partners to share benefits and risks for a common business purpose." Partnership refers to the organization established by law, the partners in order to achieve a common purpose and jointly contribute, share income, share risks and share profits.

Articles 967-978 of the the People's Republic of China Civil Code provide for partnerships as a typical contract and do not require partnerships to be concluded by written agreement. Article 4 of the the People's Republic of China Partnership Law stipulates that "the partnership agreement shall be concluded in writing by consensus of all partners in accordance with the law" if the partners intend to establish an organization in the form of a partnership, a written partnership agreement shall be signed. The author believes that the above provisions are not contradictory, but distinguish between commercial partnership and civil partnership. Specifically, commercial partnership has a profit purpose, which is adjusted by the partnership law. The main form of commercial partnership is general partnership or limited partnership, which needs to go through industrial and commercial registration, and the operation time is generally long and stable; Civil partnership does not require profit for the purpose, and does not need industrial and commercial registration, It can be temporary, adjusted by the Civil Code.

The Court held that "(I) is a question about whether Liu Jiuhou's case is a mine funder. In the original trial, Liu Jiuhou submitted receipts issued by Ji Jianeng and Zhang Hengchang on February 19, 2001 and receipts issued by Zhang Hengchang on May 12 and May 13, 2001 to receive transfer fees, proving that the mine was purchased by him. Lu Chengwei submitted an Agreement signed with Xiong Xuguang on December 9, 2002 to purchase mining rights, proving that the mining rights involved in the mine were purchased by Lu Chengwei. Although Lu Ze said that he entrusted Liu Jiuhou to pay for the purchase of the mine, but because Lu Ze failed to provide a payment power of attorney, Liu Jiuhou provided the receipt also did not receive the words of Lu Chengwei's payment, so the claim evidence is insufficient. The original trial found that Liu Jiuhou was transferred to the mine and Lu Chengwei was transferred to the mining rights, and each paid the corresponding transfer fee, and it was not improper for both parties to invest together ...... (III) the question of whether there is a partnership between the two parties. Although there is no written contractual relationship between Lu Chengwei and Liu Jiuhou, Lu Chengwei has no evidence that he entrusted Liu Jiuhou to pay the money involved in the purchase of the mine, nor has there been evidence that he has paid wages to Liu Jiuhou for many years, and there is an employment relationship between the two parties. Lu Zifa acts as an agent for Lu Chengwei to invest and manage the mine. The mine has always been operated and managed by Liu Jiuhou. Both parties invest and operate together. It should be determined that there is a de facto partnership between the two parties."

Case analysis:The original Supreme People's Court on the implementation of<中华人民共和国民法通则>Article 50 of the opinions on certain issues stipulates that "if there is no written partnership agreement between the parties and has not been approved and registered by the administrative department for industry and commerce, but other conditions for partnership are met, and two or more non-interested parties prove that there is an oral partnership agreement, the people's court may recognize it as a partnership." In my opinion, joint contribution, shared management, shared risk and shared income are the criteria for identifying the legal relationship of the partnership, and the proof of more than two non-interested parties cannot be used as the formal elements for identifying the legal relationship of the partnership.

The Court held that "although Han Chao has always advocated the existence of a partnership between him and Zhuang Zhikun, according to the facts that have been identified in this case, no formal written partnership agreement has been signed between Han Chao and Zhuang Zhikun, and the partnership advocated by Han Chao has not been approved and registered by the administrative department for industry and commerce. Secondly, according to Han Chao's statement, Xinghua Company was able to contract the interior decoration project of InterContinental Haitang Bay Hotel due to its operation during the bidding period of the project. According to the facts that have been ascertained in this case, after Xinghua Company contracted the interior decoration project of Haitang Bay Intercontinental Hotel from Xintianfang Company, Xinghua Hainan Branch has signed "Contract Agreement" with Zhuang Zhikun and Han Chao on May 27, 2013 and June 1, 2013 respectively, agreeing to contract out the banquet hall, restaurant and underground first floor conference room of the second bid section of Haitang Bay Intercontinental Hotel interior decoration project to Zhuang Zhikun for construction, the marine restaurant, gym, children's activity center and SPA center project will be contracted to Han Chao for construction. From the point of view of the constituent elements of the partnership, the existence of joint capital contribution and joint operation of the partners is an important consideration in determining whether the partnership is formed. Even though this case, as Han Chao said, paid the bidding fees and later maintenance fees for the project involved in the case, Zhuang Zhikun denied that there was a partnership between him and Han Chao, while the interior decoration project contractor of Haitang Bay Intercontinental Hotel was Xinghua Company, and Han Chao was only the actual constructor of part of the project. It cannot be ruled out that Han Chao's payment of the above funds was based on advance payment for Xinghua Company or Zhuang Zhikun. In other words, in the absence of other valid evidence to support the case, the case can not simply because Han Chao claims to have the above-mentioned payment behavior, that is, of course, to determine that there is a joint capital contribution and joint operation between him and Zhuang Zhikun on the project involved in the case. Thirdly, the 6.3 million yuan involved in the case was paid to Han Chao by Xinghua Hainan Branch from August 2013 to November 2013. Han Chao claimed that the amount was drawn according to the proportion of 30% of the total project cost involved in the case. Although Zhuang Zhikun signed the above payment documents to confirm, but because Han Chao withdraw the above-mentioned funds when the project is still in the construction period, at this time Han Chao that is, according to a certain proportion of the total cost of the project to collect money, obviously contrary to the sharing of income, sharing the risk of the necessary elements of the partnership. Fourth, although Han Chao claimed that it was under the witness of Wang Guangkai, head of Xinghua Hainan Branch, that he reached an oral agreement with Zhuang Zhikun on matters related to the project in the cooperative contract case, and applied for Wang Guangkai to testify in court during the original trial, Wang Guangkai also testified in court. However, the cooperative contract cannot be directly equated with a partnership, and according to Han Chao's statement during the original trial, it has a cooperative relationship with Xinghua Company for many years. The reason why Xinghua Company was able to contract the interior decoration project of InterContinental Haitang Bay Hotel also benefited from Han Chao's operation. In addition, as mentioned above, the 6.3 million yuan involved in the case was paid to Han Chao by Xinghua Hainan Branch from August 2013 to November 2013. If there is no partnership between Han Chao and Zhuang Zhikun in this case, Xinghua Hainan Branch will lose its basis in claiming to pay 6.3 million yuan to Han Chao according to the oral agreement between Han Chao and Zhuang Zhikun. Therefore, in this case, not only Xinghua Company and Han Chao have interests, but also Xinghua Hainan Branch and its head Wang Guangkai also have interests with Han Chao as a branch of Xinghua Company, a party signing the Contract Agreement and the actual payment subject of 6.3 million yuan. Therefore, the statements made by Xinghua Company and Xinghua Hainan Branch in this case about the existence of an oral partnership between Han Chao and Zhuang Zhikun and the testimony made by Wang Guangkai about the existence of an oral partnership between Han Chao and Zhuang Zhikun cannot be used as the basis for determining the existence of a partnership between Han Chao and Zhuang Zhikun. In summary, the existing evidence in this case is not sufficient to determine the existence of a partnership between Han Chao and Zhuang Zhikun."

Case analysis:Cooperative operation is a mode of operation in which the parties to the cooperation enjoy rights and assume obligations in accordance with the contract, and the parties to the cooperation shall assume their respective obligations and responsibilities to the outside world in accordance with the agreement. Cooperative operation is different from partnership, the partnership parties share the proceeds, share the risk, the partnership parties enjoy joint and several claims and bear joint and several liability for the partnership project. The party who claims the existence of partnership legal relationship needs to prove the existence of partnership agreement, and whether there is joint investment and joint operation is an important reference factor. In this case, the party who claims the existence of partnership legal relationship provides witness testimony, payment certificate and other evidence to prove the existence of partnership agreement and joint investment. However, considering that the testimony expresses the interest relationship between cooperation and witnesses, the payment may be advance payment and other factors, the Supreme Court finally corrected the original trial's determination that the case was a partnership legal relationship on the grounds of insufficient evidence. The author thinks that the commercial subject should sign a written agreement to clarify the rights and obligations of the parties, the rights and obligations are equal, and the attempt to achieve the purpose of not taking risks by not signing a contract may also mean the loss of the benefits of the commercial partnership.

The Court held that "the nature of the legal relationship between the parties. Article 14 of the" Interpretation of the Supreme People's Court on the Application of Legal Issues in the Trial of Disputes Involving State-owned Land Use Rights Contracts "stipulates:" The cooperative development of real estate contracts referred to in this interpretation refers to the provision of land use rights, funds, etc. An agreement with the basic content of joint investment, shared profits, and shared risks to cooperate in the development of real estate. "article 26 stipulates:" If the parties to the cooperative development of real estate contract agree to provide funds do not bear business risks and only collect a fixed amount of money, it shall be recognized as a loan contract. "in this case, the memorandum of cooperation signed by both parties stipulates that Ma Zhongying will invest 30 million yuan in Lunhua company in his own name. The starting date of investment is October 6, 2011, the investment period is three years and six months, and the exemption period is one year, that is, the latest return date of investment return is April 6, 2016, and the total return of principal and investment return is 110 million yuan. The above agreement shows that although Ma Zhongying handled matters related to the cooperation project and participated in project management as agreed, Ma Zhongying provided funds only to receive a fixed amount of return and did not bear operational risks. Therefore, the legal relationship between the parties does not have the element of sharing risks, and is not a cooperative development real estate contract in legal nature, and should be recognized as a loan relationship."

Case analysis:Private lending refers to the act of financing between natural persons, legal persons and other organizations and between them, and the nature of both parties is debt. In determining whether it is in line with the legal relationship called partnership is actually a loan, the focus should be on whether it is in line with the nature of the partnership of "risk sharing, income sharing", if the agreement has a guarantee clause, fixed income clause, etc. may be considered to belong to the loan legal relationship, rather than the partnership legal relationship.

4. The referee's point of view:The two parties to the agreement have not established a joint venture. The newly established company is a separate company established by one party to the agreement. The other party has not participated in the operation and management of the newly established company. The newly established company relies on the resources and conditions provided by both parties to the agreement. Therefore, the two parties to the agreement establish a cooperative joint venture instead of a partnership joint venture. Therefore, the "guarantee clause" agreed in the agreement is the true intention of both parties, does not violate the legal prohibition of legal and effective. The terms of the investment income agreed in the agreement and the terms of the payment of fees by one party to the other are legal and valid.

The court of first instance held that a joint venture contract is an agreement between enterprises or between enterprises and institutions to achieve a certain economic purpose. This case is a dispute over a joint venture contract. The signing of the Agreement on Joint Mining of East Lake Limestone Mine and the Supplementary Agreement between the plaintiff and the defendant is an expression of the true intention of both parties. It does not violate the mandatory provisions of the law and should be deemed legal and effective and binding on both parties. In this case, although the plaintiff and the first defendant agreed in the contract to jointly form the East Lake Tianshan Turpan Mineral Development Company, and the assets invested by both parties as the assets of the newly formed enterprise, joint operation and management. However, in actual performance, only one party to the contract, the defendant Xinjiang Tianshan Cement Company, established the Donghu Mining Branch of Xinjiang Tianshan Cement Company, which is now Turpan Tianshan Cement Company. The company used the resources and conditions provided by both parties to conduct business activities. The parties did not establish a partnership and the plaintiff could not directly participate in the management. It is essentially a collaborative joint venture relationship. The Supreme People's Court's Answers to Several Questions Concerning the Trial of Disputes over Joint Venture Contracts (abolished by the Supreme People's Court on January 1, 2021) stipulates: "The guaranteed clause in a joint venture contract usually refers to the clause that although one party of the joint venture invests in the joint venture and participates in the joint operation and shares the profits of the joint venture, it still has to recover its capital contribution and collect fixed profits when the joint venture loses money. The guarantee clause violates the principle of shared profit and loss and risk-sharing that should be followed in the joint venture activities, harms the legitimate rights and interests of other associates and the creditors of the joint venture, and should therefore be recognized as invalid". The above-mentioned provisions on the "invalidity of the minimum guarantee clause" in the joint venture contract apply to the type of joint venture established by the joint venture parties, that is, the corporate type joint venture and the partnership type joint venture, while for the cooperative type joint venture, because there is no joint venture, each joint venture shall bear civil liability with the property owned or managed by each joint venture, and shall not be bound by the above-mentioned provisions. Therefore, the law allows cooperative joint venture parties to freely agree on the distribution of benefits. Article 33 of China's partnership law stipulates: "the profit distribution and loss sharing of partnership enterprises shall be handled in accordance with the agreement of the partnership agreement; if the partnership agreement is not agreed or the agreement is not clear, it shall be decided by the partners through consultation; if the negotiation fails, the partners shall distribute and share according to the proportion of paid-in capital; if the proportion of capital contribution cannot be determined, equally distributed and shared by the partners". It can be seen that even if a partnership is established, the distribution of profits and losses is first handled in accordance with the partnership agreement. China's Civil Code also provides for the distribution of profits and losses of partnerships in accordance with the agreement of the partnership contract. The agreement of the parties in this case is not contrary to the spirit of the above-mentioned legal principles. The so-called "guaranteed clause" in the contract involved in the case is the true intention of both parties, which is a valid agreement and should be protected by law. Therefore, the court did not support the defendant's claim that the relevant provisions of the contract involved in the case were invalid. A contract established in accordance with the law shall be legally binding on the parties, and both parties shall perform it strictly in accordance with the contract. Article 5 of the Agreement on Joint Mining of East Lake Limestone Mine stipulates that "Party B shall guarantee Party A to obtain an investment income of 1 million yuan per year (the part exceeding the quota shall be distributed according to the proportion of equity)"; Article 1 of the Supplementary Agreement, Article 5, Article 1 of the Original Agreement, is revised to read: "Party B shall guarantee Party A to obtain an investment income of 1 million yuan per year, and the profit of the joint venture company exceeds 1 million yuan, party B will still be allocated to Party A at a rate of 40%"; Article 3 of the Supplementary Agreement "Party B shall pay Party A a mining right usage fee of 10000 yuan per year......". According to the above-mentioned terms, Xinjiang Tianshan Cement Company shall pay a total of 1.01 million yuan of investment income and mining rights royalties to Donghu Cement Plant every year. However, since 2014, Xinjiang Tianshan Cement Company has not paid 10000 yuan in mining rights royalties. 500000 yuan was paid in 2015 and the remaining 510000 yuan was not paid. Since 2016, Xinjiang Tianshan Cement Company has not paid the investment income and mining rights royalties to Donghu Cement Plant. By 2020, Xinjiang Tianshan Cement Company owes 5.57 million yuan......

The Court believes that the focus of the dispute in this case is as follows: whether the 1. between Xinjiang Tianshan Cement Company and Donghu Cement Plant is a partnership joint venture or a cooperative joint venture; 2. the validity of the agreed terms on investment income and mining right usage fees; 3. Donghu Cement Plant claims whether Xinjiang Tianshan Cement Company has legal basis and should be supported for paying investment income and mining right usage fees. Regarding focus 1, the difference between partnership type joint venture and cooperative type joint venture lies in whether to set up a joint venture for joint operation. in this case, according to the "work contact letter on the revision of the agreement between Xinjiang Tianshan cement co., ltd. and Xinjiang donghu cement co., ltd." issued by Turpan Tianshan cement co., ltd. and Xinjiang donghu cement co., ltd. on September 23, 2016, "clause 1. cooperation content: actually both parties have not established a, whether to delete this clause..." and other content, it can be seen that Donghu Cement Plant and Xinjiang Tianshan Cement Company did not form a joint venture in accordance with the contract during the performance of the contract, and the cooperative relationship formed between the two parties is actually a cooperative joint venture relationship. Therefore, Xinjiang Tianshan Cement Company claims that Turpan Tianshan Cement Company is a joint venture jointly established with Donghu Cement Plant and that the partnership-type joint venture relationship formed between it and Donghu Cement Plant is not established, and the Court does not support it in accordance with the law. With regard to focus 2, according to Article 53 of the General principles of the the People's Republic of China Civil Law, "if enterprises or enterprises and institutions operate independently in accordance with the provisions of the contract, their rights and obligations shall be stipulated in the contract and each shall bear civil liability." although it is not stipulated in the contract to operate independently, in this case, no joint venture was set up in the process of contract performance, which is actually independent operation. Donghu Cement Plant and Xinjiang Tianshan Cement Company agreed in the Agreement on Joint Exploitation of Donghu Limestone Mine between Xinjiang Tianshan Cement Co., Ltd. and Xinjiang Donghu Cement Plant and the Supplementary Agreement that Party B, Xinjiang Tianshan Cement Company, shall guarantee that Party A, Donghu Cement Plant, shall obtain an annual investment income of 1 million yuan. Party B will still distribute 40% of the profits of the joint venture company exceeding 1 million yuan to Party A; xinjiang Tianshan Cement Company claims that the above agreement belongs to the guarantee clause in the "Supreme People's Court's Answers to Several Questions on the Trial of Joint Venture Contract Dispute Cases" and should be invalid. The Court is of the view that the formation between the appellant and the appellee is a collaborative joint venture, the two parties have not established a joint venture, each joint venture shall bear civil liability with their own or managed property, and the agreement between the appellant and the appellee on the investment income is not bound by this guarantee clause, and the agreement shall be valid. Regarding the appellant Xinjiang Tianshan Cement Company's claim that the subject of mining rights is not the appellee Donghu Cement Plant, the agreement on the use fee of mining rights is invalid, because the agreement was made under the circumstances that the mining rights have been agreed to be owned by the newly formed company, it is the true intention of both parties, and it does not violate the mandatory provisions of the law and should be valid. With regard to focus three, a contract established in accordance with the law has legal effect on the parties. When the East Lake Cement Plant in Xinjiang Tianshan Cement Company failed to fulfill its contractual obligations to pay the corresponding amount, it required Xinjiang Tianshan Cement Company to fulfill its contractual obligations and pay the corresponding amount, I .e. investment income and mining rights usage fees, which was supported by the court in accordance with the law.

Case analysis:The joint venture can be divided into legal person type joint venture, partnership type joint venture, cooperative joint venture refers to the legal form in which the parties to the agreement operate in accordance with the agreement, and the rights and obligations are borne by each other in accordance with the contract. The newly established company in this case is established by one party to the agreement. Because there is no fact that the parties to the agreement jointly operate and manage the joint venture, this case cannot be regarded as a partnership legal relationship. Because there is no fact of joint operation and management, it cannot refer to the application of the Supreme People's Court's Answers to Several Questions on Trial of Joint Venture Contract Disputes (abolished by the Supreme People's Court on January 1, 2021). The parties shall assume obligations and responsibilities in accordance with the agreement. The author believes that although the specific provisions on joint ventures have been canceled after the implementation of the Civil Code, the "Answers to Several Questions of the Supreme People's Court on the Trial of Joint Venture Contract Dispute Cases" before the implementation of the Civil Code still has important reference significance for the people's courts to hear cases, the Civil Code removes the provision for joint ventures because it already provides for joint ventures in the scattered provisions of the Partnership Act, the Civil Code and the Companies Act. If it constitutes a jointly funded and jointly operated partnership type joint venture, then because both parties are involved in the operation and management of the project, in accordance with the principle of reciprocity of rights and obligations and in accordance with the legal rules of the Partnership Law on the sharing of profits and risks of partners, the guarantee clause may also be considered invalid.