In terms of quantity, undistributed profit is the balance of the undistributed profit at the beginning of the enterprise plus the net profit realized in the current period MINUS the extracted surplus reserve and distributed profit.
Undistributed profit refers to the remaining profit in the balance of the enterprise over the years after the net profit realized by the enterprise makes up for the loss, withdraws the surplus reserve and distributes the profit to investors. Compared with other parts of owners' equity, enterprises have greater autonomy in the use of undistributed profits and are less restricted by national laws and regulations.
First, the difference and connection between undistributed profit and net profit
The relationship between undistributed profit and net profit is not equal.
1. First of all, they have different definitions. Net profit is generally called after-tax profit or net income, which refers to the retained profits of enterprises after paying income tax according to the stipulated total profits. Undistributed profit is a part of the owner's equity before distribution, which means that the undistributed profit of the enterprise can continue to be distributed in future years.
2. The two versions are also different. The undistributed profit belongs to the owner's equity account, and the amount of distributed profit at the beginning of the year plus the total accumulated net profit in the income statement of this year is the end of undistributed profit. Net profit is the net income after deducting operating costs and expenses from operating income, and it is a profit and loss account.
2. Income tax shall be paid if the net profit is negative.
If the tax collection method is adopted, the profit of the enterprise will be negative and income tax will be paid. If the approved collection method is adopted, income tax should be paid as long as there is income. According to the regulations, the general corporate income tax rate is 25%, and the taxable objects are income from selling goods, transferring property, interest, providing labor services, royalties, rents, dividends, donations and other income.
Third, the order in which enterprises distribute profits.
Profit distribution shall meet the following requirements:
1, calculate the profit available for distribution first;
2. Withdraw the statutory surplus reserve fund;
3. Withdraw any surplus reserve fund;
4. According to the articles of association, profits can be distributed according to the proportion of capital contribution or other ways.
legal ground
company law
Article 166
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.
After the company withdraws the statutory reserve fund from the after-tax profits, it may also withdraw the reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or general meeting.
A limited liability company shall make up its losses and withdraw its after-tax profits in accordance with the provisions of Article 34 of this Law.
Prescribed distribution;
A joint stock limited company shall distribute shares according to the proportion of shares held by shareholders, except that the articles of association of a joint stock limited company stipulate that shares shall not be distributed according to the proportion of shares held.
If the shareholders' meeting, shareholders' general meeting or the board of directors violates the provisions of the preceding paragraph and distributes profits to shareholders before the company makes up losses and withdraws the statutory reserve fund, the shareholders must return the profits distributed in violation of the provisions to the company.
The company's shares held by the company shall not be distributed.