Profit distribution model of limited liability company

Legal analysis: shareholders receive 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. 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. Profit distribution refers to the distribution of the total profits realized by an enterprise and the profits obtained from a joint venture between the state and enterprises and between enterprises within a certain period of time, usually within one year.

Legal basis: Article 167 of the Company Law of People's Republic of China (PRC), the premium paid by a joint stock limited company to issue shares at an issue price exceeding the par value of the shares and other income listed in the capital reserve fund as stipulated by the financial department of the State Council are listed as the company's capital reserve fund. 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 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statutory common reserve fund of the company is more than 50% of the registered capital of the company, it may not be withdrawn.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year, the profits of the current year shall be used to make up for the losses before the statutory reserve fund is withdrawn in accordance with the provisions of the preceding paragraph.