Research On Legal Regulations Of Company Capital Reduction

As the main social responsibility bearer,enterprises have provided society with a large amount of production and living materials,and have created various wealth on which people live.The stability of a large number of companies in society is related to the smooth operation of various national science,education,culture and health undertakings.An important aspect of company stability is the stability of capital.A stable capital structure can effectively guarantee a company’s sustainable and long-term operation.The company’s operation is a production and value-added activity based on the capital structure,and its process has obvious characteristics of initiative,expansion,and continuity.From a monetary point of view,company operation is the financial operation of capital.Without the existence of capital,there would be no operation of the company.The company has the two basic attributes of humanity and capitalization,and the two complement each other and cannot be separated.No company is purely based on capital cooperation,without the cooperation of people,and vice versa.In the operation of a company,there will always be conflicts among shareholders,and conflicts often come from the appreciation of equity and dividends.For the company,shareholder conflicts are always lingering,and the final result is that some people will leave and some will stay.Then,the capital reduction occurred as the shareholders left the company.For company development,capital reduction is a reverse measure,which will have an adverse effect on the scale and production of the company.In business operations,profits are accompanied by losses.When the algebraic sum of retained earnings,that is,the algebraic sum of surplus reserves and undistributed profits,is less than zero,the company’s investment capital,that is,the sum of paid-in capital and capital reserves,will be less than investment.At this time,it is necessary to reduce the value of a single business share.Theoretically speaking,when such a situation occurs,capital reduction measures should be taken.This requires the introduction of a foreign nominal capital reduction system.However,my country does not require the pricing of a single business share of a limited liability company,which makes it difficult for investors to understand the true value of the equity when the equity is transferred.At the same time,since my country currently allows listed companies to carry out share repurchases,they are mainly used for employee incentives and the issuance of preferred shares.This kind of special capital reduction has appeared widely,but my country’s company law does not have relevant provisions on share repurchase.At present,there are few legislations and practices on various types of corporate capital reduction issues in my country,and there is a very large research gap.The initial establishment of the company system was to form the cooperation of capital and human resources,and to expand the resources and capabilities of the enterprise.The original intention was to achieve a state of public ownership by shareholders.However,it is inevitable that many of the company’s capital operations have moved towards capital concentration,with the rights and interests of major shareholders increasing,and the rights and interests of small and medium shareholders decreasing.When a company has formed a minority of large shareholders’ absolute control over the company,large shareholders often use control of the management and governance to not distribute profits and form effective corporate resolutions,resulting in small and medium shareholders only seeing the increase in the value of their apparent personal share.Cannot enjoy the profit distribution.In today’s highly developed financing market,the form of debt has developed and derives a very wide variety of forms.From the early bank borrowings to today’s corporate debt,convertible bonds,warrants,and perpetual bonds,the debt has reached unprecedented levels.The degree of development.How to protect the interests of company creditors has been an important content of the law since the establishment of the field of company law,and it should be even more so now.The creditor protection system was a main content when the company’s legal person system was created.With the continuous innovation of new transaction methods,capital operations and capital structure in the economic field,more and more shareholders abuse the company’s limited liability and take the company’s independent personality as the basis.Covering up,wanton credit fraud and evasion of debts,a large number of incidents of infringements on creditors have emerged,and the total risks faced by creditors in society are increasing.At present,there are huge problems in the field of capital reduction regulation in my country,whether in legislation or practice.The logical relationship between capital reduction and share repurchase has not been clarified,and the judge’s handling of capital reduction under the subscription system has not yet reached a high level of understanding.It is hoped that in the future company law,the scope of the company’s capital reduction will be improved,the reasons for the company’s capital reduction will be clarified,and the company’s capital reduction conditions and restrictions after the capital reduction will be improved.Regarding illegal capital reductions and improper capital reductions,the addition of faulty directors and senior executives shall bear the corresponding compensation liabilities,and it is clear that the shareholders of the capital reduction shall bear supplementary compensation liabilities within the scope of the capital reduction.By improving the relief channels for the company’s capital reduction,the protection of the interests of small and medium shareholders and creditors can be implemented,and the stable operation of company financing and investment can be realized.