Legal analysis: 1. Make up for the losses in previous years. According to the provisions of China's fiscal and taxation system, the annual loss of an enterprise can be made up by the pre-tax profit of the next year. If the pre-tax profit of the next year is not enough to make up for it, it can be made up with the profit of the next year, but the continuous period of making up the loss of the previous year with the pre-tax profit does not exceed 5 years. If the insufficient part is made up within 5 years, it will be made up with the after-tax profit of the current year. This year's net profit plus undistributed profit at the beginning of the year is the distributable profit of the enterprise. Only when the distributable profit is greater than zero can the enterprise make subsequent distribution. 2. Withdraw the statutory surplus reserve fund. According to the Company Law of People's Republic of China (PRC), the proportion of statutory surplus reserve fund is 10% of the after-tax profit (after making up the loss) of the current year. When the statutory surplus reserve fund reaches 50% of the registered capital, it can no longer be withdrawn. The statutory surplus reserve can be used to make up losses, expand the company's production and operation or increase capital, but after the company uses the surplus reserve to increase capital, the balance of the statutory surplus reserve shall not be less than 25% of the registered capital before the company's capital increase. 3. Withdraw any surplus reserve. According to the Company Law of People's Republic of China (PRC), after the company withdraws the statutory reserve fund from the after-tax profits, it can also withdraw any reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or shareholders' meeting. 4. Distribute profits to investors. According to the Company Law of People's Republic of China (PRC), the company can distribute dividends (profits) to shareholders (investors) after making up the losses and withdrawing the provident fund, in which the shareholders of a limited liability company will share the dividends in proportion to the paid-in capital contribution, except that all shareholders agree not to share the dividends in proportion to the capital contribution; A joint stock limited company shall distribute shares according to the proportion of shares held by shareholders, except that the articles of association of a joint stock limited company stipulate that shares shall not be distributed according to the proportion of shares held.
Legal basis: Article 166 of the Company Law of People's Republic of China (PRC), when distributing the after-tax profits of the current year, the company shall withdraw 10% of the profits and include it in the company's statutory reserve fund. If the accumulated amount of the statutory common reserve fund of the company is more than 50% of the registered capital of the company, it may not be withdrawn.
If the statutory reserve fund of the company is insufficient to make up for the losses of the previous year, the profits of the current year shall be used to make up for the losses before the statutory reserve fund is withdrawn in accordance with the provisions of the preceding paragraph.
After the company withdraws the statutory reserve fund from the after-tax profits, it may also withdraw the reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or general meeting.
After-tax profits of the company after making up losses and drawing provident fund shall be distributed by the limited liability company in accordance with the provisions of Article 34 of this Law; A joint stock limited company shall distribute shares according to the proportion of shares held by shareholders, except that the articles of association of a joint stock limited company stipulate that shares shall not be distributed according to the proportion of shares held.
If the shareholders' meeting, shareholders' general meeting or the board of directors violates the provisions of the preceding paragraph and distributes profits to shareholders before the company makes up losses and withdraws the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the company.
The company's shares held by the company shall not be distributed.