Enterprise profit distribution refers to the distribution of net profit among the state, enterprises and investors according to the distribution form and order stipulated by the national financial system. The object of enterprise profit distribution is the net profit after the enterprise pays income tax, which is the rights and interests of the enterprise, and the enterprise has the right to distribute it independently. According to the Company Law of People's Republic of China (PRC), when the company distributes the after-tax profits of the current year, it shall withdraw 10% of the profits and include it in the company's statutory reserve fund. If the accumulated amount of the statutory common reserve fund of the company is more than 50% of the registered capital of the company, it may not be withdrawn.
What is the order of profit distribution?
Profit distribution shall be conducted in the following order:
1。 Make up for the losses of previous years;
2。 Withdraw the statutory provident fund;
3。 Withdraw any provident fund;
4。 Dividend to shareholders or distribute profits to investors.
I hope the above content can help you. Please consult a professional lawyer if you have any other questions.
Legal basis: Article 4 of the Company Law of People's Republic of China (PRC).
Shareholders of a company shall enjoy the right to return on assets, participate in major decisions and choose managers according to law.
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 97
Shareholders have the right to consult the Articles of Association, the register of shareholders, corporate bond stubs, minutes of shareholders' meetings, resolutions of board meetings, resolutions of board meetings and financial and accounting reports, and make suggestions or queries on the company's operation.