Questions on running a company in China (21-30)
Time:2024-07-18 08:51:04Source:Click:次
21. What non-monetary assets can be used for shareholders' contributions?
Answer: Contributions can be in the form of tangible assets, intellectual property, land use rights, equity, claims, and other legally transferable non-monetary assets except for the property which is not allowed to be used as capital contribution as stipulated by laws and administrative regulations.
22. How should shareholders pay their capital contributions to the company?
Answer: Monetary contributions should be deposited in the company's bank account, while non-monetary contributions must be legally transferred to the company's name.
23. Is a capital verification report required for shareholders' contributions?
Answer: Except for publicly funded joint-stock companies, other companies do not need to submit a capital verification report.
24. What responsibility do other shareholders have if a shareholder fails to pay its contribution at the company's establishment?
Answer: Other shareholders share joint liability for the shortfall in contributions.
25. How should each shareholder's contribution be determined during capital increases?
Answer: Shareholders have a preemptive right to subscribe for new capital increases in proportion to their paid-up contributions unless otherwise agreed by all shareholders unless all the shareholders agree not to subscribe to the capital in accordance with the ratio of capital contribution in priority.
26. What are the types of company capital reductions?
Answer: General reduction, simplified reduction, and forfeiture reduction, each requiring different handling and notification.
27. Can companies reduce capital non-proportionally?
Answer: Non-proportional reduction requires the consent of all shareholders.
28. How to determine if a company qualifies for simplified capital reduction?
Answer: Simplified reduction applies to paid-up contributions and does not exempt unpaid contributions.
29. Can companies reduce capital when experiencing losses?
Answer: Yes, If a company incurs a loss, it shall first make up for it by using its provident fund in accordance with the law, and if it still incurs a loss, it may reduce its registered capital to make up for it. If the registered capital is reduced to make up for the loss, the company shall not distribute dividends to the shareholders, nor shall the shareholders be exempted from the obligation to pay the capital contribution or stock payment.
30. What are the forms of company mergers?
Answer: Absorption mergers (one company absorbs another) and new mergers (two companies form a new company).
