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The impact of the new Companies Act on the company's financial accounting

Author: ZhengGuoHong From: www.yourpaper.net Posted: 2009-06-10 20:41:20 Read:
Abstract: The amendments to the Companies Act directly affect the company's financial and accounting work. For the company, the financial accounting work is not only related to the company's decision-making, but also related to the interests of the creditors of the company, potential investors, employees of the company as well as other stakeholders. Distribution of benefits among these subjects directly affected by the impact of the company's financial information, and thus the "Company Law" revised accounting information obtained behavior is not just a technical problem, or a question of law.
Keywords: Company Law Finance issues revelation

Formally implemented in January 2006, "Company Law" (hereinafter referred to as the Companies Act 2006), is a more comprehensive amendments to the Companies Act enacted in 1993, a wide range of modifications involving rich content. Amendments to the Companies Act has a direct impact on the company's financial and accounting work. For the company, the financial accounting work is not only related to the company's decision-making, but also related to the interests of the creditors of the company, potential investors, employees of the company as well as other stakeholders. Distribution of benefits among these subjects are directly affected by the impact of the company's financial information, the revision of the Company Law of the accounting information obtained behavior is not just a technical problem, or a question of law.

Management company invested

(A) The minimum registered capital requirements decreased
From limited liability company in accordance with industry were limited to 3 million into unified. In addition, the investment company can be fully paid within five years. The minimum amount of registered capital, the former Companies Act 1000 million down to 500 million. Reduction of the threshold for companies to set up, help in the creation of the fund-raising activities. Original "Company Law" minimum registered capital of a limited liability company, excessive shackles of socio-economic development and entrepreneurial desire, to some extent, also in the creation of the fund-raising more difficult.
(B) to allow enterprises installments funded
Companies Act requirements, the registered capital paid-in capital contributions, or paid-in equity total 2006 Company Law, shareholders of a limited liability company five years paid up registered capital of the joint stock limited company set up the first subscription shall not less than 20% of the registered capital, the rest can be paid up within the next two years. Therefore, to distinguish the difference between "capital contribution" and "paid-in capital" in the financial accounting. In addition, the companies want to not pay capital calls, will inevitably lead to the generation of cost, this part of the accounting treatment to the Financial Accounting bring the new research topics.
(C) capital contribution in the form of more casual
The original "Companies Act" expressly limited to the capital contribution in the form in money, in kind, industrial property, non-patent technology, land use rights in five different form of property. The revised Company Law "includes not only the physical assets, including non-monetary assets, debt, equity, both as a capital contribution in the form, the broader the scope of the concept of capital contribution in the form. It also established that the contribution of the non-monetary assets, the highest proportion can reach 70%, both to encourage reinvestment of idle assets, investment enthusiasm inspired technicians. Assessment of the non-monetary assets and this will inevitably lead to a series of questions. However, the prohibition of labor, assets such as goodwill, credit requirements, but also brought new problems in practice.
(D) the impact of funding management
Companies Act 2006 provides that: "the State Council on the Company issued other types of shares outside the provisions of this Law, and separate provisions." Which in theory AG preference shares issued to provide support. A long time, with the right of our country are the same shares, never issued preferred stock. In accordance with the provisions of the Companies Act 2006 ", the Corporation may issue preference shares, preferred shareholders generally can not be in the middle to the company requirements Divestment of non-voting shares of the company's significant operating advantage financed.
(E) to expand the issuance of corporate bonds the main scope of the impact of debt financing
Companies Act 2006 on the main issue, modify, Co., Ltd., a wholly state-owned companies and state-owned enterprises in more than two or more than two state-owned investment entities invest in the establishment of a limited liability company, to raise funds for production and operation corporate bonds can be issued in accordance with this Law provisions, provided that they meet the prescribed conditions of the Securities Act, the Regulations Governing the Issuance of corporate bonds, the bonds can be issued. This means they meet the provisions of the Companies Act 2006, companies are likely to become the subject of the issuance of corporate bonds. The main issue of expanding to reflect the fair competition in the market, bond financing issued by the Company to bring convenience, so that the fund-raising has become more diversified and enhanced selectivity.

The company's investment management

Modifications of the investment limits on foreign investment. The Companies Act 2006 to delete the original investment amount shall not exceed 50% of the net assets limit self-imposed left to the Articles of Association. Protect the counterparty to the interests of the people, safeguard the security of transactions on the premise, it is conducive to the company's investment activities, the Company increased the investment in the space of their own decisions.
Modify the impact of the company's investment activities of the investment object. The provisions of Article 15 of the Companies Act, 2006 provides that "the company can invest in other enterprises, modify the original Company Law" to other limited liability company, joint stock investment ". The terms of this modification is to relax the objects of the company's investment, the company's investment to expand. 2006 Companies Act require companies to foreign investment in order to protect the legitimate rights and interests of the creditors, the investor shall become jointly and severally liable for the corporate debt investment.
Add the establishment of the beneficial effects of the modifications of one of the company's investment activities. Original "Companies Act" does not allow the establishment of a limited liability company, the Companies Act 2006 provides that: "The purposes of this Law, a limited liability company, is the only one natural person shareholder or a corporate shareholder limited liability company. "One-person limited liability company shall be in the company registration indicate the natural person wholly-owned or corporate-owned, and set forth in the company's business license," This shows that, the company can separate investment in the establishment of one-person limited liability company, but itself is except one person limited liability company's . Foreign investment for the company, "Company Law" modified there a new direction of investment could be considered, especially for those investment founded a limited liability company wholly-owned company, is hoping this is a good investment choice.

The company's dividend distribution

Revised the provisions of the Companies Act: "Shareholders in accordance with the proportion of paid-in capital contribution, take the bonus, but all the shareholders agree not division of profits in proportion to the amount of investment or not in proportion to the amount of investment priority of subscription, except the company distributes dividends, The dividend should be allocated in accordance with the proportion of paid-in capital contribution or the agreed proportion. Dividend provisions to implement the "no profit, regardless of the principle that the company that year, non-profit, in principle, distribution of dividends, otherwise, the shareholders must be refunded to the violation of the provisions allocated profit company.
As for the proportion of the dividend distribution, the Companies Act 2006 to further expand the autonomy of the company's dividend distribution ratio and the proportion of investment regulations allow, the Scheme of Arrangement between the recognition shareholders. Thus confirmation of investor gains may have two situations: First, the proportion of shares subject to the two based on the agreed proportion prevail.
The Companies Act 2006 changes in the terms of the "dividend, the impact to the company's consolidated financial statements filer, and this corresponds to the principles of corporate finance, accounting standards related aspects will be appropriate to make a change, the scope of the consolidated financial accounting statements will be expanded.


On the problem of the distribution of profits

(A) the statutory public welfare fund is no longer extract
Companies Act 2006 to cancel the provisions of the company to extract profit after tax from 5% to 10% the proportion of the Community Chest. Financial Accounting with this adaptation has two problems, one is the accounting treatment of profit distribution should be adjusted, canceled "Profit appropriation - statutory public welfare fund and surplus reserves - Statutory public welfare fund" subjects; another for The statutory public welfare fund accumulated in the past several years to make the approach that should be used for the company's original provision for statutory public welfare fund retrospective adjustment method to write off the original provision for the statutory public welfare fund.
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