(1) The Measures for the Administration of the Registration of Corporate Debt-to-Equity Swaps (Order No.57 of the State Administration for Industry and Commerce), which came into effect from 2065438+2002 1, clearly defined the definition of "debt-to-equity swap". The so-called debt-to-equity swap means that the creditor's creditor's right to a limited liability company or a joint stock limited company established in China is converted into the company's equity to increase the company's registered capital.
(II) The Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Several Issues Concerning the Treatment of Enterprise Income Tax in Enterprise Reorganization also stipulates that debt-to-equity swap refers to the act that creditors convert their creditor's rights to the debtor into equity and make concessions to the debt when the debtor has financial difficulties, in accordance with a written agreement reached with the debtor or a court ruling.
Second, the creditor's rights can be converted into equity.
According to the provisions of Article 3 of the Measures for the Administration of the Registration of Debt-to-Equity Swaps of Companies (Order No.57 of the State Administration for Industry and Commerce), there are three situations in which debt-to-equity swaps can be considered:
(1) Contractual debts. In the operation of the company, the contractual debt between the creditor and the company is converted into the company's equity, and the creditor has fulfilled the contractual obligations corresponding to the creditor's rights, and it does not violate the prohibitive provisions of laws, administrative regulations, the State Council decisions or the company's articles of association;
(two) the creditor's rights confirmed by the effective judgment of the people's court are converted into the company's equity;
(3) During the bankruptcy reorganization or settlement of the company, the creditor's rights contained in the reorganization plan approved by the people's court or the settlement agreement approved by the ruling are converted into the company's equity.
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