Research On The Dividend After The Subscription Capital System

This paper mainly studies the dividend distribution system of the limited liability company after the subscription capital system.Dividend distribution system is always ignored in several changes of the company law,while the same capital contribution system under the framework of the capital system has been completely far beyond recognition compared to what it was 20 years ago.Dividend distribution system has long been tainted.Under the background of the capital contribution system reform,the shortcomings of the distribution system have been infinitely enlarged.The core principle of the dividend distribution systemconsiders the balance of interests between creditors and shareholders of the company and implements in the practice of the company law through the time and degree of distribution.This paper consists of two parts,which are the introduction and the text.The article is divided into five chapters.The first section combed the basic concepts of the capital system,distribution system,etc.,gave an overview introduction of the discussion background,and elaborated the differences between the value selection of limited companies and listed companies in the distribution of dividends.The second chapter discusses the logical relationship between the changes of the capital contribution system and the changes of the distribution system.Through Three doctrines of capital and the different practices of the distribution system in the states of the United States,conclusion was drawn that the changes of the capital contribution system and the changes of the distribution system are not sufficient conditions.Thethird chapter discusses China's current dividend distribution system and summarizes some drawbacks.The fourth chapter analyzes the United States and Germany via comparative method and focuses on how the German distribution system affected by the EU law and the process of the evolution of the US distribution system.The fifth chapter summarizes the possible choices of the distribution system under the current background of company law reform and puts forward some suggestions for reform.The basic content of this article is as follows:The paper first proposed that the distribution system,like the capital contribution system,should belong to the scope of the capital system.For a long time,the focus in the academic and judicial practice is often placed on the capital contribution system.The current company law reform is the most obvious.Secondly,the previous research on the dividend distribution system was influenced by the United States' research on the dividend distribution of listed companies in the 1970 s and 1980 s.Most of them focused on the dividend distribution of listed companies.There were few studies on the dividend distribution of limited companies.This round of the capital system reform does not discuss too much on the damages that may adversely affect creditors,such as dividend distribution,etc.From the overall framework of institutional reforms,the distribution system has not undergone associative reforms.This paper therefore proposed the assumption of the relationship between the distribution system and the capital contribution system in the capital system.Based on the trend of loosening the contribution system,Japan,Germany,and France have seen a great deal of change in the distribution system since the time of the capital contribution system reform.The second part of the article proposes that the reform of the current round of company law will lead to a revolutionary reform of the distribution system.Although the distribution system and the capital contribution system are both under the framework of the capital system,and the distribution system will also be adjusted based on the consideration of the interests of creditors,it corresponds to the capital maintenance principle.From the perspective of the Three doctrines of capital.the determining capital principle does not one-to-one correspond to the capital maintenance principle.The change in the capital contribution system isnot a sufficient condition for the change in the distribution system from a logical point of view.From the analysis of the experience of the United States in the 1970 s,concerning the impact of the capital contribution system on the statutory capital system,although there was fusion of the distribution system in most state company law,there were also states such as Delaware that did not move,or changed,in the distribution system,very little.The third part of the article mainly analyzes the current distribution of dividends and their supporting systems.Article 166 of the "Company Law" stipulates that the amount left after the losses have been made up,statutory common reserve,and discretionary common reserve(if necessary)have been drawn,the after-tax-and-fee profits can be used as a basis for distribution.In the dividend distribution system that relies heavily on accounting statements,although the distribution order of the“Company Law” and the accounting regulations on the major items(statutory reserves,dividends)is the same,the calculations of the profit distribution base due to making up for losses still exist large differences.In addition,the weaknesses of the balance sheet-based dividend distribution judgment are more obvious in the closed company equity financing.In order to maintain the shareholding ratio of the founding shareholders and the previous round of shareholders,most of the funds injected into the company by each round of financing parties in practice have entered into capital reserve accounts,leaving only a small portion to the company's registered capital,Unicorn has borne a capital responsibility for the creditors with a statutory reserve that is far less than the actual operating amount,completely deviating from the original intention of protecting creditors.The fourth part of the article mainly analyzes the regulation of dividend distribution between the United States and Germany.First of all,this part analyzes the evolution of the American distribution system.After the 70 s of the last century,the United States' dividend distribution system showed three patterns: operating surplus,net assets surplus and double solvency testing.Among them,the operating surplus criterion refers to the business surplus that can only be distributed after the income in the business operation is greater than the expenditure.This standard was establishedby the "US Standard Company Law" before 1980.The net asset surplus criterion means that under certain conditions,the surplus of capital items can be used to distribute dividends.The substantive judgment rule appears later,and it does not depend on the balance sheet.The core idea of this method is that the dividend distribution is judged by the criteria for bankruptcy distribution.From the evolution of the United States,we can easily see that the judgment of the distribution system gradually changes from the formal standards to substantive standards.In addition,for German research,we have chosen the perspective of EU legislation on the impact of German company law: after a long period of uncertainty,in the process of European Community legal integration,there exists the competitive pressure of the bottom line of the company capital system of the United Kingdom and other reformed countries.Germany embarked on a reform of its limited liability company system.In the "Law for the Modernization and Anti-abuse of Limited Liability Companies"(2008)(Modernisierung des GmbH-Rechts und zur Bek?mpfung von Missbr?uchen(MoMiG)),the strict distribution system was gradually affected by the EU's unified legislation,which tended to ease and deformalize.The fifth part of the article first sums up the relationship between the two systems under the capital system,especially based on the comparison of the regulations on the dividend distribution system between China's company law and accounting standards and Germany's and the United States',as it is dependent on the owner's equity of the balance sheet.The amount of the following subjects has been separated from the company's actual liabilities and other indicators,and because it is contrary to the rules of the company law and accounting systems for a long period of time,the distribution system reform is imperative.Although judging from the time,the capital contribution system reform and the distribution system reform are most likely to occur within a short period of time,the distribution system has long been detrimental to the past,which was not due to the capital contribution system reform that came into being.If toughly combining the two into one place in logic,it will be inevitable to be far-fetched.Besides,this section summarizes three ways of discriminating dividends and analyzes the direction of our country's choice.Inaddition to the traditional methods,the author also focused on analyzing the wit dividend,which refers to the dividends from the current profits,and determined that the current earnings can be used to distribute dividends rather than make up for previous losses.The original intention of its establishment was to take care of the needs of commercial practice,that is,when the company was unable to obtain further debt financing due to serious losses,it must use the current shares to obtain corresponding dividends as bait to obtain new share capital.The author believes that the double solvency standard of the "Model Business Corporation Act" is more likely to be practical and reasonable for China's reform direction.