What exactly is the registered capital used for?
Registered capital is the amount of property operated and managed by the enterprise legal person or the amount of the property owned by the enterprise legal person. The registered capital refers to the total amount of capital registered by the enterprise with the administrative authority for industry and commerce, which is the record and confirmation of the capital contribution of shareholders and their shares, and is also the guarantee for the company to bear the responsibilities of debts, liquidation, bankruptcy and so on. So, what is the difference and connection between registered capital and registered capital?
First of all, both registered capital and registered capital are a form of enterprise property, but there are obvious differences between the two. Registered capital is the capital actually received by the enterprise, which is a dynamic concept, while registered capital is the total amount of capital registered by the enterprise with the administrative authority for industry and commerce, which is a static concept. To put it simply, registered capital is the asset that the enterprise actually owns, while the registered capital is the asset that the enterprise should have.
So, what exactly is the registered capital used for? First of all, registered capital is the material basis for an enterprise to carry out business activities and a necessary condition for the normal operation of an enterprise. Businesses need to use the registered capital to purchase equipment, lease space, hire employees, pay for goods, and so on. Secondly, the registered capital is also the guarantee for the enterprise to bear the liabilities of debt, liquidation, bankruptcy and so on. If the enterprise becomes insolvent, the registered capital will be used to cover the debt liability of the enterprise.
So, what if the enterprise needs to change the registered capital? Generally speaking, enterprises need to follow the following steps to change the registered capital:
1.Convene a general meeting of shareholders or the board of directors to pass a resolution on the change of registered capital;
2.Preparation of balance sheet and property list;
3.notify creditors and make an announcement;
4.Creditors have the right to demand that the company pay off debts or provide guarantees;
5.apply to the administrative authority for industry and commerce for change of registration;
6.Change the business license and make an announcement.
Specifically, the capital increase process and the capital reduction process are slightly different. If an enterprise needs to increase its registered capital, it can do so by absorbing new shareholders or increasing capital contributions from existing shareholders. Enterprises need to first determine the amount and proportion of the new registered capital, then prepare a capital increase agreement and sign relevant documents, and finally apply to the administrative authority for industry and commerce to change the registration. If an enterprise needs to reduce its registered capital, it can do so by reducing shareholders or reducing capital contributions. Enterprises need to first determine the amount and proportion of the reduction of registered capital, then prepare a capital reduction agreement and sign the relevant documents, and finally apply to the administrative authority for industry and commerce to change the registration.
It should be noted that the change of registered capital involves the property and legal liabilities of the enterprise, and must be carried out in strict accordance with the relevant laws and regulations and the articles of association of the company. At the same time, the change of registered capital must also be approved and registered by the administrative authority for industry and commerce, otherwise it may face legal liability and credit risk.
In short, both registered capital and registered capital are a form of expression of enterprise property, but there are obvious differences and connections between the two. Enterprises need to correctly understand the meaning and role of registered capital and registered capital, and manage and use them in strict accordance with relevant laws and regulations and the articles of association. At the same time, enterprises also need to adjust their registered capital in a timely manner according to the actual situation and market changes to ensure the normal operation and development of enterprises.