Legal analysis: the principle of after-tax profit distribution refers to the basic rules that companies should follow when distributing after-tax profits according to law. Order: 1. Make up for the loss In order to protect the interests of the company's creditors and society and implement the principle of capital enrichment, when the company has a surplus this year, it should first check whether there is a loss in the previous year. If there is a loss, and the company's statutory reserve fund is not enough to make up for the losses in previous years, the company's current profits should be used to make up for the losses first. 2. Put forward the statutory provident fund. According to the relevant provisions of China's Company Law, if the company still has a surplus after making up the losses in the current year, at least 10% of the profits should be withdrawn and included in the statutory reserve fund. When the accumulated amount of the statutory common reserve fund of the company is 50% of the registered capital of the company, it shall not be withdrawn. 3. Withdraw the statutory public welfare fund. According to the relevant provisions of China's Company Law, after the company withdraws the statutory provident fund, it should also withdraw 5%- 10% of the profits and include them in the statutory public welfare fund for the collective welfare of employees. 4. Pay dividends on preferred shares. Preferred shareholders often give up their beneficial rights as shareholders more or less, generally do not participate in the company's business decisions, and do not enjoy the rights and interests of the provident fund. As compensation and balance for giving up rights, investment risk must be reduced. Therefore, the dividend payment of preferred shares should take precedence over the withdrawal of any provident fund, so as to prevent the company from using the withdrawal of any provident fund to harm the rights and interests of preferred shareholders. 5. Withdraw any provident fund. Arbitrary provident fund refers to the provident fund that the company decides to withdraw according to the situation without mandatory provisions by law. China's "Company Law" stipulates that a company can withdraw its statutory reserve fund from its after-tax profits, and it can withdraw any reserve fund by resolution of the shareholders' meeting. 6. Pay dividends on common stock. After completing the above distribution procedures according to law, if there is still surplus profit, the company can pay dividends to ordinary shareholders according to the determined profit distribution plan. Limited liability companies are distributed according to the proportion of shareholders' capital contribution, and joint stock limited companies are distributed according to the proportion of shares held by shareholders.
Legal basis: People's Republic of China (PRC) Company Law.
Article 35 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.
Paragraph 3 of Article 167: After the company withdraws the statutory reserve fund from the after-tax profits, it may also withdraw the reserve fund from the after-tax profits upon the resolution of the shareholders' meeting or shareholders' meeting. After-tax profits of the company after making up losses and drawing provident fund shall be distributed by the limited liability company in accordance with the provisions of Article 35 of this Law; A joint stock limited company shall distribute shares according to the proportion of shares held by shareholders, except that the articles of association of a joint stock limited company stipulate that shares shall not be distributed according to the proportion of shares held.