Legal analysis: the advantage of reducing registered capital is that it reduces unnecessary advances. At the same time, it also lightens the responsibility of the company once it goes bankrupt. In the annual inspection, enterprises with less registered capital are easy to clear customs, while enterprises with less registered capital for industry and commerce and taxation are not easy to attract attention. Registered capital corresponds to limited liability, and the company will bear as much responsibility as the registered capital. And some business areas need a certain registered capital. If the registered capital is large, it will gain the trust of customers, because the limited liability is large.
Legal basis: Article 177th of the Company Law of People's Republic of China (PRC). 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.