The principle of profit distribution is to share dividends according to the proportion of paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. When the company distributes the after-tax profit of the current year, it shall withdraw 10% of the profit and include it in the company's statutory reserve fund. If profits are distributed to shareholders before the company makes up the losses and withdraws the statutory reserve fund, shareholders must return the profits distributed in violation of regulations to the company.
Interpretation of the provisions on profit distribution in the Company Law
1, make up for the company's losses. A company's loss means that the company's profit in a fiscal year is lower than the sum of all its costs, expenses and losses. During the existence of the company, the company should always keep its real estate equal to its capital. When a company has a profit, it should first make up for the company's losses with the profit, so that the company's capital can be maintained.
2. Withdraw the statutory provident fund. If the company still has a surplus after the after-tax profit of the current year makes up for the losses, it shall withdraw the listed statutory reserve fund 10%. After the accumulated amount of the statutory common reserve fund of the company reaches 50% of the registered capital of the company, it may not be withdrawn. The company shall not reduce the proportion of statutory provident fund.
3. Withdraw any provident fund. In addition to drawing the statutory reserve fund, the company can also draw a certain reserve fund from the after-tax profit after drawing the statutory reserve fund according to the actual situation of the company. This part is extracted by the company itself, which is not stipulated by law and is called arbitrary provident fund. It is up to the company to decide how much to withdraw from any provident fund.
4. Pay dividends on common stock. After the above distribution, if the company's after-tax profits are still surplus, it can pay dividends to the common shareholders of the company according to the determined profit distribution plan. Unless otherwise agreed by all shareholders, the limited liability company shall receive dividends according to the proportion of capital contribution actually paid by shareholders; Unless otherwise stipulated in the articles of association, a joint stock limited company shall distribute shares according to the proportion of shares held by shareholders. The company's shares held by the company shall not be distributed with dividends.
Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to pay dividends according to the proportion of capital contribution or not to subscribe for capital contribution in priority.
Legal basis:
Article 34 of the Company Law of People's Republic of China (PRC)
Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to pay dividends according to the proportion of capital contribution or not to subscribe for capital contribution in priority.
Article 35 After the establishment of the company, shareholders may not withdraw their capital contribution.
Article 36 The shareholders' meeting of a limited liability company shall be composed of all shareholders. The shareholders' meeting is the authority of the company and exercises its functions and powers in accordance with this Law.