What if the company does not distribute profits to shareholders?

2012-03-21] Reality puzzled Wang participated in the investment of a limited liability company, the registered capital of 800,000, Wang invested 150,000, and the other 3 shareholders invested 650,000. The company is mainly engaged in the sales of electronic products, and Wang does not understand electronic products, so he does not participate in the specific operation of the company. The company has been established for 5 years and has not given Wang a single dividend.

Wang asked, and Zhang, who was in charge of the work, said that the company was not profitable and had no dividends to distribute to shareholders. Wang proposed to distribute dividends at the shareholders' meeting, but other shareholders were unwilling to distribute dividends because of the current economic difficulties. Wang learned that the company had actually been making a profit, and he asked Zhang and others to buy his equity, but the other party was unwilling.

Does the company comply with the law if it does not distribute profits to shareholders? According to the lawyer, one of the characteristics of the company is that it is for-profit, and the shareholders of the limited liability company have the right to receive dividends when the company has a surplus. Since the amount of capital contribution reflects the contribution of shareholders to the company to a large extent, and dividends are in a certain sense the return of such contributions, the proportion of capital contribution is directly proportional to the proportion of dividends.

The limited liability company has been established for 5 years and has never distributed dividends to Wang, which seriously infringes on Wang's rights and interests. China's "Company Law" stipulates that shareholders who vote against the resolution of the shareholders' meeting can request the company to acquire their equity according to a reasonable **, that is, the company does not distribute profits to shareholders for 5 consecutive years, and the company has made profits for 5 consecutive years and meets the conditions for distributing profits stipulated in this law. Therefore, Wang can legally require the company to acquire his equity, including the value of his shares and the dividends that should be distributed to him.

Article 75 of the Company Law of the People's Republic of China In any of the following circumstances, the shareholders who voted against the resolution of the shareholders' meeting may request the company to acquire their equity according to a reasonable **: (1) the company has not distributed profits to shareholders for five consecutive years, and the company has made profits for five consecutive years and meets the conditions for profit distribution stipulated in this law; (2) The company merges, separates, or transfers its main assets; (3) The business period specified in the articles of association of the company expires or other reasons for dissolution as stipulated in the articles of association arise, and the shareholders' meeting passes a resolution to amend the articles of association to make the company exist. If the shareholder and the company cannot reach an equity acquisition agreement within 60 days from the date of the resolution of the shareholders' meeting, the shareholder may file a lawsuit with the people's court within 90 days from the date of the resolution of the shareholders' meeting.

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1.The company needs to keep an eye on retaining some or all of its profits to support the company's operations and expansion;

2.The company may face some financial difficulties or legal proceedings and need to retain profits to cope with these problems;

3.It could also be a decision made by the company's management or major shareholders, due to some strategic or financial considerations.

As a shareholder, if you have questions or are dissatisfied with the company's profit distribution decisions, there are several ways you can do it:

1.Participate in shareholder meetings: At shareholder meetings, you can express your views and requirements and influence the company's decision-making.

2.Review the Articles of Association and Contracts: Ensure that the company's decisions are in accordance with the Articles of Association and the Contract.

4.Dialogue and communication: Engage in dialogue and communication with the company's management or other shareholders to understand their reasons for decision-making and to express your views and needs.

Please note that this may vary from case to case and you should seek professional legal advice if necessary.

According to the provisions of the Company Law, if the company does not distribute profits to shareholders for five consecutive years, and the company has made profits for five consecutive years and meets the conditions for distributing profits stipulated in the Company Law, the shareholders who vote against the resolution of the shareholders' meeting on not distributing dividends and dividends may request the company to acquire their shares according to a reasonable **.

In the event that the company passes a dividend resolution but the company does not implement it, the shareholders have the right to sue the company and require the company to implement the effective resolution and pay the dividends to the shareholders in a timely manner.

According to Article 74 of the Company Law, if a shareholder and the company cannot reach an equity acquisition agreement within 60 days from the date of the resolution of the shareholders' meeting, the shareholder may file a lawsuit with the people's court within 90 days from the date of the resolution of the shareholders' meeting.

What should I do if the company does not distribute profits to shareholders?

According to the provisions of the Company Law, if the company does not distribute profits to shareholders for five consecutive years, and the company has made profits for five consecutive years and meets the conditions for distributing profits stipulated in the Company Law, the shareholders who vote against the resolution of the shareholders' meeting on not distributing dividends and dividends may request the company to acquire its equity according to a reasonable **. In the case that the company passes the dividend resolution but the company does not implement it, the shareholders have the right to sue the company, requiring the company to implement the effective resolution and pay the dividends to the shareholders in a timely manner.

No, undistributed profits are accumulated after paying tax, so they do not need to be taxed. Undistributed profit is the undistributed profit of the enterprise. It can continue to be distributed in subsequent years and is part of the owner's equity until the distribution is made.

From a quantitative point of view, the undistributed profit is the balance of the undistributed profit at the beginning of the period plus the net profit realized in the current period, minus the various surplus reserves withdrawn and the profits ceded. The tax bureau believes that the undistributed profits have been greater than the value of the original equity, so the equity premium, only to require the payment of transfer income tax, the data that has been declared before, now it is basically impossible to change, you can consult the local firm, now the equity transfer is generally required to provide the equity transfer book to inform the liquidation report, the firm can provide you with some advice.

According to Article 74 of the Company Law, if a shareholder and the company cannot reach an equity acquisition agreement within 60 days from the date of the resolution of the shareholders' meeting, the shareholder may file a lawsuit with the people's court within 90 days from the date of the resolution of the shareholders' meeting.