Rural collective economic organizations play a crucial role in realizing the rural revitalization strategy. The enactment of the Civil Code confirms their special legal entity status and lays the foundation for future land reform in China. Rural collective economic organizations possess distinctive attributes such as pre-existence, duality of organizational functions, closed membership, and public ownership of collective assets. However, it is these very attributes that have led to institutional dilemmas including blurred external boundaries, uneven distribution of organizational functions, limited benefits for farmers within the organization, and exposure to market risks. Therefore, it is urgent to establish a legally sound institutional expression. It is essential to clarify the roles of rural collective economic organizations and village committees, achieveing a separation of governance and economy. Public service functions should be appropriately separated, while production and operational functions are strengthened. Simultaneously, a dual-layer membership structure should be established, allowing for a moderate opening of collective membership qualifications.The insolvency capacity of rural collective economic organizations should be recognized, but the collective ownership of land and non-operational assets should be excluded from the scope of liability.