How to go through the legal procedures for the company's capital reduction?
Capital reduction of a company refers to the act of reducing registered capital according to the company's capital surplus or serious losses and the actual business situation. In order to effectively implement the principle of capital determination, ensure transaction safety and protect the interests of shareholders and creditors, capital reduction should be strictly controlled by law. According to the principle of constant capital, the company's capital is not allowed to be reduced in principle. Considering some specific circumstances, China's laws allow capital reduction, but certain conditions must be met.
(1) Resolution of shareholders' meeting
The resolution includes:
① Registered capital of the company after capital reduction;
② Arrangement of shareholders' interests and creditors' interests after capital reduction;
③ Matters related to the revision of the Articles of Association;
(4) Changes in the capital contribution of shareholders and their proportions, etc. When making a resolution on capital reduction, the company should pay attention to the fact that the registered capital of the company after capital reduction shall not be lower than the statutory minimum;
(two) the preparation of balance sheets and property lists.
(3) Notify or announce creditors.
The company shall notify the creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within 30 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 the first announcement if they have not received the notice;
(4) Change of registration
The company suffered serious losses, and the gap between total capital and actual assets was too large. The company's capital has lost its due legal significance to prove the company's credit status, and shareholders have not been rewarded for the company's losses for years.
Conditions for reducing registered capital
1. The original company had too much capital, resulting in excess capital. If the capital remains unchanged, it will lead to the idleness and waste of capital in the company and increase the burden of dividends.
2. The company suffered serious losses, and the gap between total capital and actual assets was too large. The company's capital has lost its due legal significance to prove the company's credit status.
I hope the above contents are helpful to you. Please consult a professional lawyer if you have any other questions.
Legal basis: Article 179 of the Company Law.
Where a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law.