Can the paid-in registered capital be spent? How should it be spent? Let's take a look!
01. The new company law stipulates that it must be paid!
On December 29, 2023, the seventh meeting of the Standing Committee of the 14th National People's Congress voted to pass the newly revised Company Law, which will come into force on July 1, 2024.
Among them, the first paragraph of Article 47 stipulates that the registered capital of a limited liability company shall be the amount of capital contribution subscribed by all shareholders registered with the company registration authority. The amount of capital contribution subscribed by all shareholders shall be paid in full by the shareholders within five years from the date of establishment of the company in accordance with the provisions of the articles of association.
To put it simply, the subscription company must pay all the funds within five years, so how can it be regarded as having completed the paid-in registered capital?
01. Transfer to the company's public account or handle the transfer of property rights in a timely manner
If a shareholder makes a capital contribution in monetary terms, the full amount of the monetary capital contribution shall be deposited into the company's bank account, and if the capital contribution is made in the form of non-monetary property, the formalities for the transfer of property rights shall be completed.
Currency transfer records are the most basic evidence, and it is difficult to achieve the purpose of proof of fulfilling the capital contribution obligation only by relying on unilateral certificates and other materials issued by the company.
02. Clearly note that the purpose of the transfer is capital contribution
Shareholders clearly note that the company's transfer is "investment funds", which can be supplemented in combination with the company's financial account books and other financial procedures, so as to meet the proof standard for completing the obligation of paid-in capital contribution.
Only the transfer records without the purpose of the note are used as orphan evidence, and it is difficult to prove that the obligation to pay in the capital contribution has been fulfilled. Therefore, when the funds are transferred to the company's account, the transfer details must be noted as "investment funds", and the shareholders themselves transfer them.
03. Register and enter the account
After the corresponding funds are successfully transferred, the corresponding accounting processing shall be completed in a timely manner according to the flow of the corporate account.
04. Declare and pay stamp duty in full in a timely manner
Stamp duty is declared and paid according to the tax law, and it is registered in the account books. The stamp duty only needs to be paid once, and the corresponding tax rate is 2.5/10,000. Stamp duty has a lower tax rate among common taxes, and the corresponding tax basis of 10,000 yuan is 2.5 yuan.
So, can the paid part of the funds be used, and how should they be spent?
02. Can I spend the funds and how should I spend them?
Can't the company's paid-in registered capital be spent?
Yes, you can spend it both outwardly and inwardly!
But it is important to note that:
After the registered capital is recorded, the funds belong to the company, and are no longer the individual shareholders, and the use of registered capital can only be used by the company!
Don't make the mistake of thinking that this part of the investment is my personal investment!
Once the investment money is invested in the company, it is no longer personal money! and this money can only be used for the following aspects:
01. The daily operation of the company
The paid-in registered capital can be used to pay for the company's daily operating expenses, such as employee salaries, office rent, utility bills, etc.
02. Expand the scale of business
The paid-in registered capital can also be used to increase the company's registered capital, enhance the company's credibility and competitiveness, further expand the business scale or increase production capacity.
03. Repay debts
If the company has debts, part or all of the registered capital paid by shareholders can be used to repay the debts and reduce the company's debt pressure.
04. Invest in new projects or expand existing businesses
The paid-in registered capital can also be used to invest in new projects or expand existing businesses, such as developing new products, entering new markets, or making strategic investments such as mergers and acquisitions.
Whether it is spent outward or inward, it is necessary to obtain relevant compliance documents and have a sufficient chain of evidence! If it is only money transferred, but there is no sufficient chain of evidence, it is easy to be identified as an act of evading funds, bringing tax and legal risks!