I. Preparation of Capital Reduction Plan
The company must first prepare a detailed capital reduction plan, and make clear the purpose, method, amount and time arrangement of capital reduction. The capital reduction plan must be reviewed and approved by the company's board of directors or shareholders' meeting, and reported to the relevant regulatory authorities for approval (if applicable).
Second, notify creditors.
According to the Company Law, the company shall notify the creditors within 10 days from the date of making the capital reduction resolution, and make an announcement in the newspaper within 30 days. Creditors have the right to require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice.
Third, prepare balance sheets and property lists.
In order to ensure the transparency and compliance of the capital reduction process, the company should prepare a balance sheet and an asset list to conduct a comprehensive inventory and verification of the company's assets, liabilities and owners' equity.
Four. Disposal of capital reduction income
The income from capital reduction shall be handled in accordance with the agreement in the capital reduction plan, which can be used to repay debts, supplement working capital and invest in new projects. The company needs to ensure that the use of the proceeds from capital reduction complies with laws, regulations and the articles of association.
Verb (abbreviation of verb) industrial and commercial change registration
After the company completes the capital reduction operation, it shall submit the application for capital reduction and related materials to the administrative department for industry and commerce, and go through the registration formalities for the change of registered capital. After approval by the administrative department for industry and commerce, a new business license will be issued to reflect the registered capital of the company after capital reduction.
Six, other matters needing attention
In the process of capital reduction, the company should also pay attention to abide by tax, accounting, auditing and other laws and regulations to ensure the legality and standardization of capital reduction operations. At the same time, the company should strengthen communication with shareholders to ensure their understanding and support for the capital reduction plan.
To sum up:
The company's capital reduction is a process involving many operations and legal provisions, which requires the company to operate in accordance with relevant laws and regulations and the articles of association. Companies must strictly abide by laws and regulations when preparing capital reduction plans, notifying creditors, preparing balance sheets and property lists, handling capital reduction gains, and handling industrial and commercial change registration, so as to ensure the legitimacy and standardization of the capital reduction process.
Legal basis:
Company Law of the People's Republic of China
Article 177 stipulates:
When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets. The company shall notify the creditors within ten days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within thirty days. Creditors have the right to require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice.
Company Law of the People's Republic of China
Article 179 stipulates:
Where a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law.