The treatment of undistributed profits when an enterprise is deregistered is generally carried out in the following two steps:
First of all, it is handled in accordance with the provisions of relevant laws and regulations and the articles of association of the company. In general, the undistributed profits after the deregistration of the enterprise can be treated in the following way:
1.Transfer to other enterprises: Undistributed profits can be transferred to other enterprises in accordance with shareholder resolutions or legal procedures. For example, undistributed profits can be transferred to a parent company, subsidiary or other entity as transfer price or capital injection. In this case, it is necessary to carry out the corresponding transfer procedures and sign the contract.
2.Return to shareholders: Undistributed profits can also be refunded according to the proportion of each shareholder's capital at the request of shareholders. Previously, certain resolution procedures were required, such as the resolution of the general meeting of shareholders or the signing of a shareholders' agreement. Undistributed profits returned to shareholders can be made in cash or in the form of equity.
Secondly, in addition to the above-mentioned legal and compliant treatment, it also needs to be taxtreated. According to the tax law, the undistributed profits at the time of deregistration may give rise to relevant tax liabilities. The details are as follows:
1.Corporate income tax: When a business is deregistered, undistributed profits may incur tax liabilities for corporate income tax. The tax department will tax the undistributed profits in accordance with the relevant regulations, such as the statutory tax rate.
2.Business tax and value-added tax: The deregistered enterprise also needs to settle the unpaid business tax, value-added tax and other related taxes.
3.Stamp duty: Depending on the nature of the business, stamp duty may be payable.
When dealing with undistributed profits, companies need to comply with relevant laws and regulations and conduct legal and compliant operations. It is advisable to communicate with the tax authorities in a timely manner to understand the specific tax treatment requirements and follow the relevant procedures to ensure the legal treatment of undistributed profits.