Second, increase investment. Where a limited liability company needs to increase its capital, it may increase its capital contribution in proportion to the original shareholders, or invite others other than the original shareholders to contribute.
Third, issue new shares. A joint stock limited company may increase its shares by issuing new shares.
4. Debt-to-equity swap. A joint stock limited company can also increase its shares by converting convertible corporate bonds into company stocks.
1. Increasing the face value means that the company increases the amount of each share without changing the original total number of shares. In this way, the purpose of capital increase can be achieved. 2. Increase investment. Where a limited liability company needs to increase its capital, it may increase its capital contribution in proportion to the original shareholders, or invite others other than the original shareholders to contribute. If the original shareholders subscribe for the capital contribution, they may increase their shares or convert the capital reserve fund or dividend payable into capital contribution. 3. To issue new shares, a joint stock limited company may increase its shares by issuing new shares. Issuing new shares refers to the company issuing new shares in order to expand the capital demand. The issuance of new shares can be publicly offered to the public or subscribed by the original shareholders. 4. Debt-to-equity swap: A joint stock limited company can also convert convertible corporate bonds into company stocks. Convertible corporate bonds are bonds that can be converted into company stocks. If this bond is converted into company stock, the liabilities will be eliminated and the company's share capital will increase. Article 178 of the Company Law When a limited liability company increases its registered capital, the contribution of the newly-increased capital subscribed by shareholders shall be implemented in accordance with the relevant provisions of this Law on the establishment of a limited liability company. When a joint stock limited company issues new shares to increase its registered capital, shareholders shall subscribe for new shares in accordance with the relevant provisions of this Law on the establishment of a joint stock limited company and the payment of shares.
The ways for enterprises to increase capital are as follows:
1. When capital reserve is converted into share capital, debit "capital reserve-capital premium" or "capital reserve-capital premium" and credit "paid-in capital" or "share capital".
2. When the surplus reserve is converted into paid-in capital, the account of "surplus reserve" shall be debited and the account of "paid-in capital" or "equity" shall be credited. What needs to be explained here is that both capital reserve and surplus reserve belong to owners' equity. When converted into paid-in capital or share capital, if the enterprise is a wholly-owned enterprise, the accounting is relatively simple and can be carried forward directly; For a joint stock limited company or a limited liability company, the share capital of each shareholder shall be increased in proportion to the shares held by the original investor.
3. The capital invested by the owners (including the original enterprise owners and new investors) and the capital invested by investors accepted by the enterprise shall be debited to "bank deposits", "fixed assets", "intangible assets" and "long-term equity investment" and credited to "paid-in capital" or "equity" subjects.
To sum up, it is Bian Xiao's relevant answers to the three ways of capital increase of the company, hoping to help you.
Legal basis:
Article 178 of the Company Law When a limited liability company increases its registered capital, the contribution of the newly-increased capital subscribed by shareholders shall be implemented in accordance with the relevant provisions of this Law on the establishment of a limited liability company. When a joint stock limited company issues new shares to increase its registered capital, shareholders shall subscribe for new shares in accordance with the relevant provisions of this Law on the establishment of a joint stock limited company and the payment of shares.