Legal Issues Of The Profit Allocation

Since reform and opening up, China’s national economy has undergonetremendous changes. At the same time, as an important part of the reform of theeconomic system, the profit distribution system also has experienced many changes.On the one hand, as an important activity of the company’s financial management, theprofit distribution impact on the rights and interests of the company owner directly.On the other hand, the profit distribution system also may directly determine thedestination of the company’s profits, and then will affect the development of acompany.This paper deliberates the legal issues of the profits distribution through a varietyof methods, in which the following five are the main methods. First is a literaturestudy, through which this thesis determines the direction of the research topic at thebase of understanding of the history and current status of their research topic byliterature collection, collation, and summarization. Besides, this way also helps topromote my further thinking about profits distribution and then I can understand morerelated issues about it. Secondly, this study uses the method of conceptual analysis tofurther clarify the scope of the object that really needs to be examined in the paper bylearning the definitions of profit, distribution and profit distribution in its broad andnarrow sense. Thirdly, this paper also uses the method of interdisciplinary research.Interdisciplinary research is one of the most important ways to study the legal issues,in which different disciplines present different angles and ways so that we can make anew exploration of the distribution of profits. The subject of this thesis is On LegalIssues of The Company’s Profits Distribution in China, which is a comprehensivecross of the undergraduate learning knowledge of accounting, economic knowledgeand the knowledge of law that I learned in the past three years. Finally, this papermakes a comparative study on profits distribution that is presented in China’sCompany Law and Accounting Law, through which I can well identify the problemsof China’s profit distribution in practice, and then help to provide a better solution. By analyzing the currently profits distribution system in our law and combiningour actual condition, this paper proposes relief channels to solve the problems that hasexist. In this regard, the first part of the paper is a brief description of the concept andvalue of the profit, distribution, and corporate distribution, so as to leads to theconcept of profits distribution. And then elaborate the profits distribution theoreticallyand practically. The second part presents the relevant provisions of the law, in whichthis paper makes a comparative study on profits distribution that is presented inChina’s Company Law and Accounting Law. The third part of the thesis is mainlystates the lack of profit distribution in our practice. Through cross-referenced to thefirst two parts, we can clearly find out the shortages of our system. The last part of thethesis is mainly about the perfection of the system. Through the analysis of the firstthree parts, we can easily find that China needs to solve the related problems from thelegislative level, and at the same time, the companies should be asked to perfect theirinternal self-government. Only by that, can we better establish and improve ourprofits distribution system.Correct and reasonable profits distribution are directly related to the interests ofshareholders, employees, creditors and society in all aspects. So, by weighs thedifferent interests expectations of stakeholder, making ends meet various stakeholdersrequirements and considering the relationship between the profits distribution and aCompany’s internal decision-making in the perspective of law, the arguments of thispaper better protect the interests of small shareholders and coordinate the relationshipbetween the various profit-sharing, and then laid a foundation for the long-termdevelopment of a enterprises.