Enterprise restructuring process
1. Working procedures for the overall change of a limited company
(1) Due diligence
For restructuring projects, the main issues are the legality, business status and development prospects of the limited company since its establishment, including the following: Several aspects:
1. The legality of the capital formation process
Starting from the establishment of a limited company, it is necessary to pay attention to the method of capital contribution at the time of establishment (cash, physical assets, intangible assets, etc.) In addition to cash investment, investment in physical assets needs to be audited, evaluated and other related procedures; investment in intangible assets needs to go through relevant procedures, such as technical identification and evaluation, and investment in land needs to be evaluated by a land appraisal agency and needs to go through Confirmation from the land management department (At this stage, companies planning to be listed are no longer allowed to invest in intangible assets such as trademarks and goodwill)
In the process of continuous operation of a limited company, there will be capital increase, share expansion, equity transfer, etc., each time Whether the legal documents for an equity change (board of directors and shareholders meeting resolutions, capital verification reports, industrial and commercial change registration, etc.) are complete and whether the behavior is legal.
2. Legality of the asset formation process
The formation process of the main operating assets during the ongoing operation of the limited company.
3. Business status
1) Authenticity of business performance
2) Related transactions
3) Financial system status
4) Authenticity of financial data
In the case of a limited company, due to relatively weak supervision, the management level of managers, and the level of financial personnel, it is inevitable that there will be discrepancies in financial data. Authenticity issues, such as tax evasion in most private enterprises to some extent, can only be grasped from a broad perspective. Specific issues can only be known after hiring a certified public accountant to audit the enterprise.
5) The legality of operations in specific industries. For example, in the pharmaceutical industry, whether it has a drug production license, drug approval number, etc.; in the real estate industry, whether it has real estate development qualifications; whether engineering construction companies have engineering construction qualifications; whether communication equipment manufacturing companies have network access licenses, etc.
6) The company’s research and development capabilities and core technologies
7) Business development prospects
The information to be accessed must be original data
(2) Carry out corporate standardization work
(3) Enterprises hire intermediaries
Enterprises need to hire financial consultants to be responsible for the formulation of restructuring plans, legal and regulatory consultation, and pre-IPO guidance. , Coordination of intermediary agency relationships and production of relevant documents and materials, etc. At the same time, accountants, appraisers and lawyers with securities qualifications are hired to assist in the restructuring work.
(4) Determine the restructuring plan
Under the auspices and coordination of the financial consultant, discuss and demonstrate the restructuring plan with the company, accountants, and lawyers, including the sponsors and their Determination of investment methods, capital structure setup, financial audit, asset evaluation, financial system establishment, asset disposal (including divestiture of non-operating assets, disposal of land use rights, disposal of trademark use rights, etc.), establishment of personnel and labor systems, etc. wait.
(5) Carry out capital increase and share expansion or equity transfer
If the enterprise needs to adjust the amount of share capital, number of promoters, equity structure, etc., or needs to introduce strategic investors, Or implement management shareholding (employee shareholding), etc., which requires capital increase and share expansion or equity transfer.
(6) Carry out evaluation and audit
Determine the base date for restructuring, and have an appraiser with securities qualifications evaluate the enterprise. Under normal circumstances, companies need to be evaluated every two years. The same goes for accounting and auditing
(7) Convene board of directors and shareholders meetings to review restructuring matters, sign a sponsor agreement, and amend the Articles of Association.
(8) Pre-approval of name
Go to the local Administration for Industry and Commerce to handle the pre-approval procedure for the name of a joint-stock company. When going through the name pre-approval procedure, documents such as the promoter agreement, the name pre-approval application form signed by the chairman, and board resolutions should be submitted.
(9) Handling matters concerning the establishment of state-owned equity
If the shareholders of a limited company include state-owned enterprises or state-controlled enterprises, they need to apply to the state-owned assets management department to handle matters concerning the establishment of state-owned equity.
(10) Application for change
After the restructuring application documents (mainly including the sponsor agreement, company articles of association, financial audit report, capital verification report, board of directors and shareholder meeting resolution, etc.) are ready, Apply for changes.
(11) Establishment of a joint-stock company
After approval, the company holds the founding meeting and the first general meeting of shareholders, the board of directors, and the board of supervisors to pass the company preparation report and elect the chairman. Determine the management team, etc.
Within 30 days after the founding meeting, the board of directors of the joint-stock company shall apply for establishment registration to the provincial industrial and commercial administration department.
2. Plan design for the transformation of a limited liability company into a joint-stock company
(1) Share capital
According to Article 99 of the "Company Law", a limited liability company is approved to be changed into a joint-stock company in accordance with the law. At that time, the total amount of converted shares shall be equal to the company's net assets.
That is, the net asset value of a limited liability company audited by an accounting firm with securities qualifications on the audit base date is the share capital of the joint-stock company after the change. Since at one point in time, the net assets of the limited liability company It will not be an integer. It is generally rounded up and converted into equity. The zero number can be solved in two ways. One is to distribute the zero number to the shareholders and continue to list it in the book as a liability to the shareholders. The second is to calculate the zero number. Contribute to the capital reserve fund.
What needs to be noted here is:
If the company has a large number of joint-stock companies, the net assets in the consolidated statement and the parent company's statement may be inconsistent. When this happens In this case, in practice, the net assets reported by the parent company are generally used as the basis for stock conversion. (There is no clear regulation, or the lower of the two shall be the basis for conversion)
The "Company Law" stipulates that the minimum registered capital of a joint-stock company is RMB 5 million. A joint-stock company applies for the listing of its shares, the total share capital of the company is not less than RMB 50 million (after issuance), and the shares issued to the public account for more than 25% of the company's total shares. Currently, the shares controlled by the China Securities Regulatory Commission The issuance ratio is generally between 25 and 40. Therefore, the share capital at the time of establishment of a joint-stock company is generally not less than 30 million yuan.
If the net assets of the limited company at the time of the overall change do not reach 30 million yuan, the net assets can be increased through capital increase and share expansion.
(2) Asset status
The "Company Law" stipulates that the promoters can make capital contributions in currency, or in kind, intellectual property rights, and land use rights. The physical objects, intellectual property rights or land use rights used as investment must be evaluated, verified and converted into shares. If the promoters contribute capital with other non-cash assets, the company should obtain their ownership certificate or complete ownership.
1. Intangible assets
Intangible asset investment involves three aspects: land use rights, trademarks and goodwill, patents and non-patented technologies.
1) Land use rights
There are four ways to dispose of land related to corporate operating assets:
A. The enterprise pays the land transfer fee to the land and resources department. Obtain the land use rights;
B. The enterprise leases the land from the land and resources department;
C. The controlling shareholder of the enterprise pays the land transfer fee to the land and resources department. After obtaining the land use rights, the company will transfer the land to the land and land department. Leasing to enterprises; (We recommend not to use leasing as much as possible to avoid profit adjustments and increase the difficulty of review)
D. A combination of the above three methods.
In principle, the company should obtain complete land use rights. If the land use rights are legally obtained from the main sponsor or controlling shareholder through leasing, the lease term and payment method should be clearly stated, as well as the company's right of first option after expiration.
2) Trademarks and goodwill
According to the requirements of the China Securities Regulatory Commission, when establishing a joint-stock company, trademarks related to the operating business of the joint-stock company must be entered into the joint-stock company.
If the trademark is with the controlling shareholder when the enterprise is restructured, the controlling shareholder shall transfer the trademark and goodwill to the limited company free of charge and shall not use the trademark and goodwill as shares. (In principle, it goes with the assets. The reason for emphasizing free of charge is mainly because the contribution of such intangible assets has been included in the company's operating performance, and without the company's existing assets and the efforts of the management, these intangible assets would have been lost. The value cannot be reflected, so separate pricing is suspected of harming the interests of future public shareholders)
3) Industrial property rights and non-patented technologies
Industrial property rights are treated differently from trademarks and goodwill. , non-patented technology can be transferred to a limited company within a reasonable price range.
The amount of capital contributed by the promoters in the form of industrial property rights and non-patented technology shall not exceed 25% of the company's registered capital.
Conditions that companies planning to be listed on the GEM should meet:
1. Basic company status requirements:
(1) Companies planning to be listed on the GEM should be established in accordance with the law A joint-stock company that has been operating continuously for more than three years. (Note: If a limited liability company is converted into a joint stock limited company based on the original book net asset value, the continuous operation period can be calculated from the date of establishment of the limited liability company.)
(2) Plan to start a business The registered capital of the board company has been paid in full, and the transfer procedures for the property rights of the assets used by the promoters or shareholders to contribute capital have been completed. There are no major ownership disputes over the main assets of the company to be listed on the GEM.
(3) A company planning to be listed on the GEM shall mainly engage in one business, and its production and operation activities shall comply with the provisions of laws, administrative regulations and company articles of association, as well as national industrial policies and environmental protection policies.
(4) In the past two years, there have been no major changes in the main business and directors and senior managers of the company planning to be listed on the GEM, and the actual controller has not changed.
2. The company’s internal financial status requirements:
(1) It has been profitable in the past two years, and the cumulative net profit in the past two years is not less than 10 million yuan, and continues to grow; or Profitable in the last year, with net profit of not less than 5 million yuan, operating income of not less than 50 million yuan in the last year, and operating income growth rate of not less than 30% in the last two years. The net profit is calculated based on the lower before and after deducting non-recurring gains and losses; the net assets before the issuance are not less than 20 million yuan; there are no unrecovered losses at the end of the most recent period; the total share capital after the issuance is not less than 30 million yuan.
(2) Companies planning to be listed on the GEM should have sustained profitability (the business model, product or service variety structure is stable; there are no risks in trademarks, patents, and proprietary technologies; the net profit in the most recent year There is no customer dependence. )
(3) Pay taxes in accordance with the law, and all tax benefits comply with relevant laws and regulations. The operating results of companies planning to be listed on the GEM are not heavily dependent on tax incentives.
(4) There are no major debt repayment risks, and there are no major contingencies such as guarantees, litigation, and arbitration that affect continued operations.
3. Corporate governance structure requirements:
(1) The company planning to be listed on the GEM has a complete corporate governance structure, and has established and improved shareholders' meetings, board of directors, board of supervisors, independent directors, and board of directors in accordance with the law. Secretary and audit committee systems, relevant institutions and personnel can perform their duties in accordance with the law.
(2) Directors, supervisors and senior managers of companies planning to be listed on the GEM should understand the laws and regulations related to stock issuance and listing, and be aware of the legal obligations and responsibilities of listed companies and their directors, supervisors and senior managers.
(3) The equity of the company to be listed on the GEM is clear, and there are no major ownership disputes over the shares of the company to be listed on the GEM held by the controlling shareholder and shareholders controlled by the controlling shareholder and actual controller.
4. Internal management requirements of the company:
(1) The assets of the company to be listed on the GEM are complete, the business and personnel, finance and organization are independent, and it has a complete business system and directly faces the market Ability to operate independently. There is no horizontal competition with the controlling shareholders, actual controllers and other companies controlled by them, as well as related transactions that seriously affect the company's independence or are unfair.
(2) The company planning to be listed on the GEM shall follow the basic accounting work standards. The preparation of financial statements shall comply with the accounting standards for enterprises and relevant accounting systems, and fairly reflect the financial situation of the company planning to be listed on the GEM in all material aspects. status, operating results and cash flows, and a certified public accountant shall issue an unqualified audit report.
(3) The company planning to be listed on the GEM has a strict fund management system, and no funds are used by controlling shareholders, actual controllers and other companies controlled by them to borrow money, pay off debts, advance money on behalf of others, or otherwise The situation of mode occupation.
(4) The internal control system of the company to be listed on the GEM is sound and effectively implemented, and can reasonably guarantee the reliability of the company's financial reports, the legality of production and operations, and the efficiency and effectiveness of operations, and shall be certified by a certified public accountant. Issue an internal control assurance report with unqualified conclusions.
(5) The articles of association of the company to be listed on the GEM have clearly defined the approval authority and review procedures for external guarantees, and there are no illegal guarantees for the controlling shareholders, actual controllers and other enterprises controlled by them.
(6) Directors, supervisors and senior managers of companies planning to be listed on the GEM meet the qualifications stipulated in laws, administrative regulations and rules, and do not have the following circumstances:
① Being The China Securities Regulatory Commission has taken measures to prohibit entry into the securities market and is still in the prohibition period;
② Those who have been subject to administrative penalties by the China Securities Regulatory Commission in the past three years, or have been publicly condemned by the stock exchange in the past year;
③ Being investigated by judicial authorities for suspected crimes or being investigated by the China Securities Regulatory Commission for suspected violations of laws and regulations, but no clear conclusion has been made.
(7) The company planning to be listed on the GEM has no major illegal activities that have harmed the legitimate rights and interests of investors and the interests of the public in the past three years. In the past three years, the company planning to list on the GEM and its shareholders have not publicly issued securities without authorization or in disguised form without the approval of the statutory authority, or the relevant illegal behavior occurred three years ago but is still ongoing.
(8) The funds raised by companies planning to be listed on the GEM shall have a clear purpose and shall be used for the main business. The amount of funds raised and investment projects should be compatible with the existing production and operation scale, financial status, technical level and management capabilities of the company to be listed on the GEM.
(9) Companies planning to list on the GEM should establish a special storage system for raised funds, and the raised funds should be deposited in a special account decided by the board of directors.