1. Propose a capital reduction plan. It is necessary to prepare balance sheets and property lists and determine specific capital reduction plans.
2. Form a capital reduction resolution. The shareholders' meeting needs to vote to pass the capital reduction plan and form the corresponding resolution.
3. notify 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.
4. Creditors agree. Pay off debts through the company or provide corresponding guarantees, and obtain the creditor's consent to the company's capital reduction.
5. Go through the change registration. After the expiration of the announcement (usually 45 days), the registration materials for capital reduction shall be submitted to the administrative department for industry and commerce.
6. Obtain a new business license. After the submitted materials are approved by the administrative department for industry and commerce, a new business license can be obtained.
Conditions for capital reduction of the company:
1. The original company had too much capital and excessive formal capital. If the capital remains unchanged, it will lead to the idleness and waste of capital in the company, which is not conducive to the efficiency of capital and increases 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, and shareholders have not been rewarded due to the company's losses for years.
To sum up, it is a complicated process involving internal decision-making, creditor notification, announcement and disclosure, and industrial and commercial change registration. The company shall strictly follow the legal provisions and procedures to ensure the legality and effectiveness of capital reduction.
Legal basis:
Company Law of the People's Republic of China
Article 177
When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets. The company shall notify the creditors within ten days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within thirty 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 announcement if they have not received the notice.