Is there any reason for the company to reduce its capital? What is this? I will share it with you. Welcome to read, for reference only!<
Is there any reason for the company to reduce its capital? What is this? I will share it with you. Welcome to read, for reference only!
Enterprises reduce capital for several reasons:
*** 1*** Pay off accumulated debts in one lump sum. Due to the accumulation of operating losses for many years, even in the next few years, the profits of enterprises can not be made up. In this case, it is necessary to reduce capital to make up for the accumulated losses.
***2*** Too many adjustment funds. The company needs a lot of capital at first, but after it is on the right track, there may be excess capital, so it also needs to reduce capital.
***3*** Pay more dividends. Since dividends are distributed according to the profit of capital, reducing capital can increase dividends. At the same time, it can also be combined with "one-time repayment of accumulated debts" to eliminate losses and resume dividends as soon as possible.
* * * 4 * * Company merger. This is usually done when the company's assets are balanced.
***5*** separation part. When some departments in the company are separated and independent, assets are also separated, which is also a kind of capital reduction for enterprises. There are two types of capital reduction: formal capital reduction and substantial capital reduction. The formal capital reduction means that the capital is reduced only in the account book, and the company's property is not reduced. For example, the company repurchases a certain proportion of tradable shares, reduces the denomination, and returns a sum of money to shareholders. Capital reduction that needs to make up for losses due to poor operating conditions is a substantial capital reduction, and most of the capital reductions belong to this situation.
Capital Reduction of Companies and Protection of Creditors' Interests
In practice, some companies make substantial capital reduction through statutory capital reduction resolutions, which violates the statutory capital reduction procedures, weakens the company's credit and solvency, and threatens the interests of creditors.
The principle of constant capital requires that after the total capital of a company is determined, it shall not be changed at will without legal procedures. Article 178 of the Company Law stipulates: "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 65,438+00 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 guarantees within the statutory time limit; The registered capital of the company after capital reduction shall not be lower than the statutory minimum insurance amount. " The logic of this design is that through full disclosure and publicity, creditors can know that their rights may be threatened, and creditors can take timely measures to obtain repayment or guarantee in advance, so as to avoid the risks brought by capital reduction, especially substantial capital reduction.
If the shareholders of a company fail to fulfill their obligations of notification and announcement within the statutory time limit after making a resolution on capital reduction, or fail to pay off their debts or provide guarantees to creditors, how to determine the effectiveness of capital reduction? Civil legal norms can be divided into mandatory norms and arbitrary norms in nature. Article 178 of the Company Law has the word "should", which should be interpreted as a mandatory norm according to academic principles. According to the relevant company law theory, mandatory norms can be divided into effective norms and managerial norms. Management norms are mostly established for the needs of social affairs management, and legal acts that violate mandatory management norms are certainly not invalid. The capital reduction plan not only has procedural significance, but also will directly affect the distribution and exercise of the rights of creditors and shareholders. In this sense, the capital reduction plan also has substantial value. Therefore, in the case of unequal negotiation opportunities and the obstruction of shareholder autonomy, the law sets the procedures involving the interests of creditors as mandatory norms, which can avoid opportunistic behavior, enhance the efficiency and predictability of legal acts in the field of company law, and ensure the fairness of the results through due process. Although the Company Law does not explicitly stipulate the legal consequences of violating Article 178, it concerns the transaction safety and social stability and has a strong purpose of protecting the interests of creditors, so it should be recognized as an effective mandatory provision.
The legality of violating mandatory norms should be influenced by its illegality. Can this influence only be absolute or completely ineffective? The author believes that the court's active examination and determination of legal acts that violate mandatory norms is invalid, which may be counterproductive and should follow the principle of ignoring. It may be more in line with the legal purpose for the creditor of the protected person to decide the effectiveness of the violation of the capital reduction procedure. Creditors can bring a lawsuit to stop the capital reduction, or they can bring a lawsuit that the company's capital reduction is invalid. If the company's capital reduction has not been completed, the creditor may exercise the right to stop the capital reduction to the company and ask the company to stop its capital reduction activities. In the case of unsuccessful request to the company, the creditor may bring a lawsuit to the court, demanding that the company stop its capital reduction activities and fulfill its obligation to pay off debts or provide guarantees according to law. After the company's capital reduction is completed, the creditors have the right to bring a lawsuit to the court, requesting the court to rule that the company's capital reduction is invalid, so that the company's capital can be restored to the state before the capital reduction.
The way companies reduce capital.
The company's capital reduction, regardless of whether the surplus capital is lower than the legal standard, must comply with the law.
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. From the actual situation, one of the following conditions should be met:
*** 1*** The original company had too much capital and excess formal capital. If the capital remains unchanged, it will lead to idle and waste of capital in the company, which is not conducive to capital efficiency and increases the burden of dividends.
* * * 2 * * The company suffered serious losses, and the gap between the total capital and the 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 received due returns because of the company's losses for years.
The Company shall follow legal procedures to reduce its capital:
*** 1*** Resolution of the shareholders' meeting. The contents of the resolution include: ① the 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;
***2*** Prepare balance sheet and property list;
***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 at least three times 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 90 days from the date of the first announcement if they have not received the notice;
***4*** Change registration.
The specific ways of capital reduction include: ① reducing the total capital contribution and changing the original capital contribution ratio; ② Reduce the capital contribution of each shareholder without changing the proportion of capital contribution. In practice, the above two ways of reducing capital can be mixed.
From the above analysis, it can be seen that the company's capital reduction is strictly restricted, and the fundamental purpose of making such restrictions is to ensure the safety of transactions and protect the interests of shareholders and creditors. Therefore, in the capital reduction procedure, the capital reduction agreement must be passed by shareholders representing more than two-thirds of the voting rights, and the creditors should be announced or notified to ensure that the creditors have the opportunity to pay off or demand guarantees. Finally, the remaining capital after capital reduction must meet the statutory restrictions, but the creditors have not been notified, which is a serious violation of the law in procedure. In addition, the capital reduction agreements of the six shareholders in this case have substantially allocated the tangible assets of the company; It does not conform to the legislative purpose of the Company Law on the capital composition of limited liability companies. Therefore, the resolution should be confirmed to be invalid.
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