After the company has a creditor-debtor relationship with others for various reasons, for example, in fact, one of the ways of corporate financing is to become a shareholder. Converting this debt relationship into shares has absorbed new shareholders and expanded the registered capital of the company. In this case, it is definitely necessary for the industrial and commercial bureau to make changes. So you need to know.
Limited company debt-to-equity swap change
What information do you need?
What information does 1. Co., Ltd. need for the change of debt-to-equity swap?
What materials should be prepared for the registration of industrial and commercial change of debt-to-equity swap?
Enterprises in the preparation of debt-to-equity swap registration materials list, at least the following materials should be prepared:
1, debt-to-equity swap contract;
2. The shareholders' meeting will consider the debt-to-equity swap resolution;
3. The resolution of the shareholders' meeting on the amount of debt contribution shall be confirmed;
4. Capital verification report;
5. Revised Articles of Association;
6. Qualification certificate of shareholders;
7. Debt-to-equity swap commitment letter/judgment/settlement book, etc.
Second, the provisions of the company law on debt-to-equity swap.
1. According to the company law, creditor's rights cannot be used for capital contribution.
Article 27 1 of China's new Company Law stipulates that debt contribution is no longer prohibited, and the new Company Law has reserved legal extension space for this system, which will be filled by more practice and legislation. Therefore, from the point of view that the new company law is an open legal norm, the financial asset management company established by the state as a shareholder should be protected by law in the form of debt contribution.
From a legal point of view, creditor's rights cannot be directly converted into equity, because equity formed by investment and creditor's rights formed by contract are two completely different civil legal rights. Creditors are the obligees of contractual debts, not the holders of enterprise shares. The Company Law does not allow creditor's rights as capital contribution. Creditor's rights can neither be directly used as monetary capital contribution, nor can they replace physical and other forms of capital contribution.
However, from the perspective of the debt-to-equity swap system itself, it actually takes advantage of the fundamental difference between creditor's rights and equity. Creditor's right is a contractual right, while equity is a non-contractual right. As a debt, the loan principal and interest not only have the right of compulsory claim, but also the enterprise should list these debts as liabilities or financial expenses on the debtor side of the enterprise balance sheet. Its increase directly affects the profits of enterprises and determines whether enterprises can continue to operate. As the capital of an enterprise, equity owners have no right to claim compensation, only the right to pay dividends when the enterprise is profitable. Moreover, the equity is listed in the owner's equity of the enterprise's balance sheet, and its increase will not only affect the profit of the enterprise, but also enhance the sustainable operation ability of the enterprise. Debt-to-equity swap is to take advantage of this difference, convert creditor's rights into equity, reduce enterprise loan principal and interest expenditure, increase enterprise capital, and finally achieve the goal of turning losses into profits.
2. Violation of the provisions of the Company Law on the internal governance rights of companies. Paragraph 1 of Article 4 of the Articles of Association clearly stipulates: "As investors, shareholders of the company have the right to benefit from assets, make major decisions and choose managers according to the amount of capital invested in the company." Scholars generally believe that this is a general rule about the distribution of company power, "in principle, it should be mandatory", that is to say, "having equity means having corresponding corporate governance rights, with large equity and small equity", which is a general concept of company law.
Accordingly, a financial asset management company becomes a shareholder of the company after the debt is converted into equity. It can participate in the company's daily production and operation activities by hiring managers, sending representatives to the board of directors and the board of supervisors, or directly participate in the company's major decisions and planning the company's business strategy as a shareholder at the shareholders' meeting. These are the natural meanings of the shares it owns. However, according to the National Opinions on Debt-to-equity swap, financial asset management companies do not participate in the daily production and operation activities of enterprises, and their representatives (directors and supervisors) only participate in major decisions of enterprises. This is undoubtedly a distortion of shareholders' rights and an alienated structure of corporate internal governance.
Debt-to-equity swap agreement, capital verification report, shareholder qualification certificate, debt-to-equity swap commitment letter, shareholders' resolution on debt-to-equity swap and other relevant certificates can be registered in China's industrial and commercial bureau according to law. Moreover, both sides of the creditor-debtor relationship must understand the relevant restrictions on the conversion of creditor's rights into equity in the Company Law when deciding to convert debt into equity.