What is the capital reduction process of the company?

The company's capital reduction needs to be carried out in accordance with the statutory procedures, otherwise the purpose of reducing the registered capital cannot be achieved, the following is an introduction to the four-step process of the company's application for capital reduction, I hope it will be helpful to you.

1. What is the company's capital reduction?

The company's capital reduction refers to the company's excess capital or serious losses, according to the actual situation of the business, according to the actual situation of the registered capital, the act of reducing the registered capital according to the law. In order to effectively implement the principle of capital determination, ensure the safety of transactions, and protect the interests of shareholders and creditors, capital reduction should be strictly controlled by law. According to the principle of constant capital, in principle, the capital of a company is not allowed to be reduced.

Taking into account some specific circumstances, the law of our country allows the reduction of capital, but certain conditions must be met.

2. Statutory procedures for the company's capital reduction.

1) Resolution of the shareholders' meeting.

The resolution reads:

the registered capital of the company after the capital reduction;

Arrangements for shareholders' interests and creditors' interests after capital reduction;

matters relating to amendments to the Articles of Association;

changes in shareholders' capital contributions and their proportions, etc. When the company makes a capital reduction resolution, it should be noted that the registered capital of the company after the capital reduction shall not be lower than the statutory minimum limit;

2) Preparation of balance sheet and property list.

3) Notify or announce to creditors.

The company shall notify creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within 30 days. Within 30 days from the date of receipt of the notice, and within 45 days from the date of the first announcement if the creditor does not receive the notice, the creditor has the right to require the company to pay off the debts or provide corresponding guarantees;

4) Alteration of Registration.

The company suffered serious losses, the disparity between the total capital and the actual assets was too large, the company's capital has lost its due legal significance to prove the company's credit status, and shareholders have not been able to get due returns due to the company's losses year after year.

Further reading: How to write the resolution of the shareholders' meeting on capital reduction.

Legal provisions for the reduction of the company's capital.

What conditions need to be met for the company to reduce its capital.

Legal analysis: The procedures for reducing the company's capital are: 1. The shareholders' meeting or the general meeting of shareholders shall make a resolution to reduce the registered capital in accordance with the law and the articles of association of the company; 2. The company shall prepare a balance sheet and a list of assets; 3. Notify and announce the creditor's rights in the newspaper; 4. Handle the change registration.

Legal basis: Company Law of the People's Republic of China

Article 43 Except as provided in this Law, the manner of deliberation and voting procedures of the shareholders' meeting shall be prescribed by the company's chapter Kai Chacheng. Resolutions to amend the articles of association, increase or decrease the registered capital, and resolutions to merge, divide, dissolve or change the form of the company must be passed by shareholders representing more than two-thirds of the voting rights.

Article 177 When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets. The company shall notify creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within 30 days. Within 30 days from the date of receipt of the notice, and within 45 days from the date of announcement if the creditor has not received the notice, the creditor has the right to require the company to repay the debts or provide corresponding guarantees.

1. Make resolutions or decisions of the shareholders' meeting.

The content of the resolution or decision of a limited liability company shall include: the amount of the subscribed registered capital, the specific amount of each shareholder's commitment to reduce the subscribed registered capital, the method and date of each shareholder's capital contribution, and the corresponding amendment to the articles of association.

The content of the resolution of the shares shall include: reducing the amount of subscribed registered capital, the specific way of reducing the amount of subscribed registered capital, and amending the articles of association accordingly.

A limited liability company submits a resolution of the shareholders' meeting signed by the shareholders representing more than two-thirds of the voting rights; Shares**** submitted to the minutes of the general meeting signed by the presiding officer and the directors present at the meeting; A one-person limited liability company shall submit a written decision signed by the shareholders; The wholly state-owned company submits the approval documents of the state-owned assets supervision and administration agency of the local people's ** or the people's ** authorized by it, and the change table of enterprise property rights registration. Foreign-invested enterprises submit resolutions or decisions that have been omitted in accordance with law.

2. Amend the articles of association.

Amend the articles of association of the company according to the resolution or decision of the shareholders' meeting of the company's capital increase.

3. Handle pre-approval.

If laws, administrative regulations and decisions stipulate that the change of subscribed registered capital must be submitted for approval, the relevant pre-approval shall be handled and a copy of the relevant approval documents or licenses shall be submitted. For example, if it is a foreign-invested enterprise, it is also required to submit a valid approval document from the examination and approval authority, that is, to apply to the commerce department (bureau, committee, ministry) for approval of capital reduction and renew a new approval certificate for foreign-invested enterprise; If the registered capital of the raised shares is changed, the capital verification report issued by the capital verification agency established in accordance with the law and the approval documents of the ***** supervision and management agency shall be submitted.

4. Prepare balance sheet and property list.

When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets.

5. Notify creditors and make public announcements.

The company shall notify creditors within 10 days from the date of making the resolution to reduce capital, and make an announcement in a newspaper at or above the provincial level within 30 days.

6. Repay debts or provide guarantees.

Within 30 days from the date of receipt of the notice, and within 45 days from the date of announcement if the creditor has not received the notice, the creditor has the right to require the company to pay off the debts or provide corresponding guarantees.

7. Handle the industrial and commercial change registration.

If the company reduces its capital, it shall apply for industrial and commercial change registration after 45 days from the date of announcement. If the change of registered capital of the company involves the change or change of paid-in capital, it shall also go through the registration of the change of paid-in capital or the declaration of change at the same time.

1. Whether the company's assets can be transferred to individuals.

The company's assets can be transferred to individuals, but they can only be transferred after they comply with the provisions of the company's articles of association and are approved by the general meeting of shareholders.

Company Law of the People's Republic of China

Article 104 [Shareholders' Resolution Power on Important Matters] Where this Law and the Articles of Association stipulate that the transfer or transfer of major assets or the provision of external guarantees by the company must be resolved by the general meeting of shareholders, the board of directors shall promptly convene a meeting of the general meeting of shareholders, and the general meeting of shareholders shall vote on the above-mentioned matters.

1.The board of directors of the company formulates a capital reduction plan.

2.The company's capital reduction shall be approved by the resolution of the shareholders' meeting.

The company's capital reduction is a major matter, which must be approved by shareholders representing more than two-thirds of the voting rights, and the joint-stock company must be approved by more than two-thirds of the voting rights held by shareholders attending the meeting. In addition, the convening procedures and voting procedures of the shareholders' meeting shall strictly comply with the provisions of the law, otherwise the validity of the resolution of the shareholders' meeting of the company to reduce capital may be affected.

3.The company shall prepare the balance sheet and property list in accordance with the law, and fulfill the obligation of notification and announcement.

For the company's known creditors, the company shall notify within 10 days from the date of making the resolution to reduce the capital; For creditors unknown to the company, the company shall make an announcement within 30 days from the date of making the resolution to reduce the capital. It should be noted that the notification and announcement obligations should be performed at the same time, rather than one or the other. The announcement should be selected according to the scope of potential creditors, and try to choose the provincial or national level with great influence.

If the company's creditors are all over the country, and the company only chooses the municipal level to make the announcement, the court may find that the announcement obligation is improperly performed.

4.If the company's creditors require the company to pay off its debts or provide corresponding guarantees, the company shall take corresponding measures.

5.The company needs to change the industrial and commercial registration.

After the completion of the capital reduction, the company shall change the industrial and commercial registration in a timely manner. If the company fails to change the registration in accordance with the law, the company registration authority shall order the registration within a time limit; If the registration is not done within the time limit, the registration department has the right to impose a fine of not less than 10,000 yuan but not more than 100,000 yuan.

The company's capital reduction shall comply with the statutory procedures: 1. Prepare the balance sheet and property list; 2. Resolution of the shareholders' meeting. The resolution reads:

the registered capital of the company after the capital reduction; Arrangements for shareholders' interests and creditors' interests after capital reduction; matters relating to amendments to the Articles of Association; changes in shareholders' capital contributions and their proportions, etc. When the company makes a capital reduction resolution, it should be noted that the registered capital of the company after the capital reduction shall not be lower than the statutory minimum limit; 3) Notify or announce to creditors. The company shall notify creditors within 10 days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper at least three times within 30 days.

Within 30 days from the date of receipt of the notice, and within 90 days from the date of the first announcement if the creditor does not receive the notice, the creditor has the right to require the company to repay the debts or provide corresponding guarantees; 4) Alteration of Registration.