Subscription means that when the company is established, shareholders only need to promise the amount of capital contribution in the articles of association, without actually paying the capital contribution. Paid-in means that when a company is established, shareholders must pay their capital contribution in accordance with the amount of capital contribution stipulated in the articles of association.
The main difference between these two forms lies in the actual contribution of shareholders and the registered capital of the company. Under the subscription system, the registered capital of the company may be higher, but the actual contribution of shareholders may be lower, which may lead to the decline of the company's solvency. Under the paid-in system, the actual contribution of shareholders is equal to the registered capital of the company, and the company's solvency is stronger.
The impact of subscription and payment on the company is as follows:
1. solvency: under the paid-in system, the company's solvency is stronger because shareholders have paid in their capital. Under the subscription system, the company's solvency may be limited by the actual capital contribution of shareholders.
2. Credit rating: Under the paid-in system, the company's credit rating may be higher because the shareholders actually paid the funds. Under the subscription system, the company's credit rating may be limited by the actual contribution of shareholders.
3. Investor confidence: Under the paid-in system, investors may trust the company more, because the shareholders did pay the capital. Under the subscription system, investors' trust in the company may be reduced.
The advantages of the subscription system are as follows:
1, it is easy to start a business. Shareholders don't have to subscribe in full, which saves money. At the same time, investors are allowed to pay by installments, which provides some flexibility for the establishment and development of the company.
2. Reduce the threshold of registered capital of the company. Under the subscription system, the registered capital of a company is no longer limited by the actual contribution of shareholders, but depends on the business needs of the company and the wishes of shareholders.
3. Reduce the capital contribution pressure of shareholders. Under the subscription system, shareholders can flexibly decide the amount and time of capital contribution according to the company's operating conditions and their own financial conditions, thus reducing the pressure on shareholders.
The advantages of the paid-in system are as follows:
1, improve the company's solvency. Under the paid-in system, shareholders must actually pay their capital contribution according to the amount stipulated in the company's articles of association, which is helpful to improve the company's solvency and reduce the company's financial risks.
2. Improve the company's credit rating. Under the paid-in system, the registered capital of the company is consistent with the actual contribution of shareholders, which is helpful to improve the company's credit rating and enhance investors' trust in the company.
3. Ensure the stable development of the company. Under the paid-in system, the actual contribution of shareholders is consistent with the registered capital of the company, which helps to ensure the stable development of the company and avoid the difficulties in the operation of the company caused by insufficient contribution of shareholders.
To sum up, the difference between subscription and paid-in is clearly stipulated in the company law. Under the subscription system, shareholders only need to promise the amount of capital contribution in the articles of association, without actually paying the capital contribution. Under the paid-in system, shareholders must actually pay their capital contribution according to the amount of capital contribution stipulated in the articles of association.
Legal basis:
Company Law of the People's Republic of China
Article 23
The establishment of a limited liability company shall meet the following conditions:
(1) Shareholders meet the quorum;
(2) The capital contribution subscribed by all shareholders in accordance with the Articles of Association;
(3) Shareholders * * * agree to formulate the Articles of Association;
(4) Having a company name and establishing an organization meeting the requirements of a limited liability company;
(5) Having a company domicile.
Article 26
The registered capital of a limited liability company is the capital contribution subscribed by all shareholders registered in the company registration authority.
Where laws, administrative regulations and decisions of the State Council have other provisions on the paid-in registered capital and the minimum registered capital of a limited liability company, those provisions shall prevail.
Article 34
Shareholders shall receive dividends in proportion to the paid-in capital contribution; When the company increases its capital, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Except that all shareholders agree not to pay dividends according to the proportion of capital contribution or not to subscribe for capital contribution in priority.
Article 80
Where a joint stock limited company is established by means of sponsorship, the registered capital shall be the total share capital subscribed by all promoters registered in the company registration authority. Before the shares subscribed by the promoters have been paid in full, they may not raise them from others.
Where a joint stock limited company is established by offering, the registered capital shall be the total paid-in share capital registered with the company registration authority.
Where laws, administrative regulations and decisions of the State Council have other provisions on the paid-in amount of registered capital and the minimum amount of registered capital, those provisions shall prevail.