Basic types and technical methods of enterprise division of labor
The definition of enterprise division in the income tax law comes from the Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on Several Issues Concerning the Handling of Enterprise Income Tax in Enterprise Restructuring Business (Caishui [2009] No.59). According to its regulations, separation means that an enterprise (separated enterprise) transfers part or all of its assets to an existing or newly established enterprise (separated enterprise), and the shareholders of the separated enterprise pay equity or non-equity in exchange to realize the legal separation of the enterprise. What the separated enterprise loses is the basic assets, and the receiver of the basic assets is the separated enterprise. The separated enterprise itself will not get the consideration of the transferred assets, and the recipient of the consideration of the underlying assets is the shareholders of the separated enterprise. The separated enterprise may or may not continue to exist. There are two basic types of enterprise separation, and there are three technical ways to realize separation: surviving separation (separation of production shares and redemption shares) and newly established separation (separation of share capital). First of all, from a broad perspective, we divide the separation into surviving separation and newly established separation according to whether the separated enterprise exists after separation. Surviving separation means that after separation, the separated enterprise continues to operate without changing its name and legal person status, and the separated enterprise exists as another independent legal person. After the division, the shares of the separated enterprise shall be held by the shareholders of the separated enterprise. The new division is to divide the separated enterprise into two or more enterprises and cancel them according to law. Surviving separation usually adopts two technical methods: share split method and redemption method. Non-tradable shares refers to the separation and transfer of some assets to a new company or an existing company, and the shares of subsidiaries that accept the assets are distributed to all shareholders of the separated enterprise. At the same time, the share capital of all shareholders in the separated enterprise is reduced in proportion, and sometimes it can remain unchanged. Note: The result of the split share structure mode is that enterprises are separated but shareholders are not separated, and the shareholders of the separated enterprise and the separated enterprise are the same after separation. Share-sharing redemption refers to separating some assets of the separated enterprise to form a new subsidiary or existing company, and distributing the equity of the new company to some shareholders of the separated enterprise in exchange for their shares in the separated enterprise, so that these shareholders no longer hold the shares of the separated enterprise. Note: The result of the separation of foreclosed shares is not only the separation of enterprises, but also the separation of shareholders. Some shareholders still own separate enterprises, and some shareholders own separate enterprises. The newly established division usually adopts the division of share capital, that is, the company is split into two or more new companies and the original company is dissolved. The division of share capital can be divided into two typical ways. The first belongs to the separation of enterprises and shareholders. All the shareholders of the separated enterprise have obtained all the shares of the separated enterprise in a balanced way according to the original shareholding ratio, the original shares of the separated enterprise have been cancelled according to law, and the separated enterprise has been dissolved according to the provisions of the Company Law. The second category belongs to the separation of enterprises and shareholders. Similarly, if different shareholders of a separated enterprise acquire shares of different separated enterprises, they shall dissolve the separated enterprise according to the Company Law and cancel their shares according to law.