Advantages and disadvantages of enterprise capital increase

Advantages of enterprise capital increase:

1, intellectual property capital increase is completely reasonable and legal behavior, far superior to the use of advance payment, loans and other means. And intellectual property rights can account for 70% of the registered capital.

2. The registered capital of enterprises has increased, and enterprises have gained more chances to win the bid when bidding for projects.

3. Using intellectual property rights to increase capital not only reflects the image and strength of the enterprise, but also shows the technical value of the enterprise, which is helpful for the enterprise to attract investment and cooperation.

4. Enterprises that increase their capital through intellectual property rights do not need to occupy too much working capital in the annual inspection of industry and commerce. It can alleviate the difficulty of insufficient registered capital of newly established enterprises and enterprises that need to increase capital and share.

The shortcomings of the company's capital increase are:

1, the capital cost is relatively high. On the other hand, it is easier to disperse the equity and even lose the controlling stake. Of course, this situation can be controlled.

2. It can be inferred whether it is necessary to increase capital and expand shares according to whether it is necessary to control the shares. If you want to raise money and don't want to lose your controlling interest, you can use other financing channels, such as bank loans and bond issuance.

3. After the company's capital increase, if shareholders are short of money in the future, they cannot withdraw part of the registered capital from the company unless they go through complicated capital reduction procedures. Moreover, some fees have increased, and many fees are charged according to a certain proportion of registered capital, such as capital verification and auditing.

Legal basis:

Article 178 of the Company Law of People's Republic of China (PRC)

When a limited liability company increases its registered capital, the contribution of the newly-increased capital subscribed by shareholders shall be implemented in accordance with the relevant provisions of this Law on the contribution of limited liability companies. When a joint stock limited company issues new shares to increase its registered capital, shareholders shall subscribe for new shares in accordance with the relevant provisions of this Law on the establishment of a joint stock limited company and the payment of shares.

Article 179

Where a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law. Where a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law.