Port communicationLearn knowledge! What is the difference between capital increase and share expansion and equity transfer? Regarding capital increase and share expansion and equity transfer issues，In reality, capital increase and share expansion are often confused with equity transfer.，actually，There is a big difference between the two，"Capital increase and share expansion" and "equity transfer" are both transactions in the equity field.，However, there are essential differences in the respective shareholdings.。
The difference is as follows 1、The recipient of capital increase and share expansion funds is an enterprise，The recipient of equity transfer funds is the original shareholder. In the case of capital increase and share expansion, the recipient of funds is the target enterprise.，rather than corporate shareholders，The nature of the funds belongs to the capital of the target company，The rights and obligations of original shareholders may not change； In equity transfer, the recipient of funds is the original shareholder，The nature of the funds is the consideration obtained from the transfer of equity by the original shareholder.，The rights and obligations of the original shareholders are inherited by the equity transferee。
2、Capital increase and share expansion increase the registered capital of enterprises，The registered capital of the equity transfer company remains unchanged. Capital increase and share expansion are the measures taken by the company to raise shares from the public.、issue stock、New shareholders invest in shares or original shareholders increase investment to increase the registered capital of the company.。 Equity transfer is when corporate shareholders transfer their shareholder rights to others in accordance with the law.，Civil legal acts that make others become shareholders of the company，Only involves the equity transferor and equity transferee，It will not increase the registered capital of the enterprise。
3、The tax cost of original shareholders’ equity remains unchanged due to capital increase and share expansion，Adjustment of the tax calculation cost of the original shareholder's equity in the equity transfer. Capital increase and share expansion. The equity of the original shareholder may be diluted.，However, the tax basis of the original equity will not be adjusted.，The increased paid-in capital and capital reserves of the enterprise belong to the newly invested capital by shareholders.，No corporate income tax is levied on shareholders’ investment funds； Equity transfer: Zhongyuan shareholders transfer their shareholder rights to the equity transferee，The income from equity transfer is deducted from the tax calculation cost and related taxes of the equity and is recognized as "property transfer income" and income tax is levied.； However, the amount that may be distributed based on the equity from the retained earnings of shareholders such as the undistributed profits of the invested enterprise shall not be deducted.，At the same time, the tax basis of the original shareholder's equity is adjusted according to the proportion of equity transfer.。
For example，Company B is a wholly-owned subsidiary of Company A，Registered capital is 10 million yuan，Evaluated，The fair value of company B’s net assets is 20 million yuan，Company C intends to become a shareholder of Company B，owns 50% of the shares，Can be taken in two ways： (1) Equity transfer,That is, Company A transfers 50% of the equity it owns in Company B to Company C.，The transfer price is 10 million yuan； (2) Capital increase and share expansion,That is, Company B adopts the method of private placement，Registered capital increased to 20 million yuan，C invested 20 million yuan，Obtain 50% of the equity of Company B。
It is assumed that the payment forms of the above two businesses are monetary funds.，And ignore the relevant taxes and fees incurred on the transaction，Then the accounting and income tax treatment under the two methods are as shown in the following table： It can be seen that，The act of increasing capital and expanding shares by introducing new shareholders is completely different from the act of equity transfer.： Capital increase and share expansion mean that an enterprise increases its capital and expands its equity.，Original shareholders’ equity remains unchanged； Equity transfer means that the capital of the enterprise remains unchanged and the equity remains unchanged.，Transfer of shareholder rights by original shareholders。
Common ways to increase capital and expand shares 1、Undistributed profits of the company、Conversion of public reserve fund to registered capital is in accordance with Article 167 of the Company Law，The company's after-tax profits must first be used to make up for losses and withdraw statutory reserve funds(The extraction ratio is 10%，The cumulative amount of the company's statutory public reserve exceeds 50% of the company's registered capital，Can no longer be extracted)； There is something left，can be distributed among shareholders。
When distributing company profits，By resolution of the shareholders’ meeting，It can be directly converted into registered capital，Increase shareholders’ capital contribution。 According to the provisions of Article 169 of the Company Law，Increasing company capital is one of the uses of provident funds，It should be noted that，When the statutory reserve fund is converted into registered capital，The reserve fund retained shall not be less than 25% of the company's registered capital before the transfer.。
in addition，The company's retained earnings、Conversion of provident fund to increase registered capital，Unless there are special provisions in the company's articles of association，Otherwise, the limited liability company shall be based on the proportion of capital actually paid by the shareholders.(For details, please refer to Article 35 of the Company Law)、A joint stock company shall be based on the proportion of shares held by shareholders(For details, please refer to Article 167 of the Company Law)Increase shareholders’ registered capital。
2、The original shareholders of the company increase their capital contribution. The shareholders of the company can also rely on the provisions of Article 27 of the "Company Law"，Invest currency or other non-monetary property into the company at a price，Directly increase the company’s registered capital。
It should be noted that，Non-monetary property used as capital contribution should be evaluated and valued，Verify property，Do not overestimate or underestimate the price； The currency used as capital contribution shall be deposited into the bank account established by the company，Non-monetary property used as capital contribution shall undergo transfer procedures for its property rights in accordance with the law.(For details, please refer to Article 28 of the Company Law)。 3、New shareholders invest in shares, increase capital and expand shares，Strategic investors can become new shareholders of the company by investing in shares。
The price of investment by new shareholders，Generally determined based on the ratio of the company’s net assets to registered capital，The premium should be included in the capital reserve。 Other，According to the provisions of Article 162 of the Company Law，Convertible bonds issued by listed companies can also be converted into the company’s registered capital，The company's registered capital increased after the conversion，The status of the bond holder is changed from the company's creditor to the company's shareholder。 It should be noted that，The above methods of capital increase and share expansion can be mixed and used。
Issues that need to be paid attention to during the process of capital increase and share expansion 1、Convert undistributed profits to registered capital，The transfer ratio should not be too high，Leave some room，Otherwise, the performance on the company’s books after the transfer is(Mainly profit margin)will be affected，This is detrimental to the company's long-term development。
Not only that，The undistributed profits used for conversion shall be deducted from the depreciation due and unpaid as of the time of conversion and the tax payable and unpaid.； The company may not withdraw depreciation or pay taxes on time，This means that when the registered capital is actually increased, corresponding accounting provisions and accounting adjustments need to be made.。
If the transfer ratio is too high，Once a larger amount of depreciation and tax adjustments are involved，You may fail the capital verification； If that's the case，It is necessary to readjust the capital increase and share expansion plan，This will not only affect the process of capital increase and share expansion，and may have a negative impact on the company's reputation，It is detrimental to the development of the company。 2、To increase capital and expand shares for the purpose of listing，Some issues need special attention。
"Measures for the Administration of Initial Public Offerings and Listing of Stocks"(Securities Regulatory Commission Order No. 32)Article 9："Since the establishment of the joint stock company, the issuer，The continuous operation period should be more than 3 years，Except those approved by the State Council。A limited liability company is converted into a joint-stock company as a whole by converting its original book net asset value into shares，The duration of continuing operations can be calculated from the date of establishment of the limited liability company。
” Article 12：“The issuer’s main business and directors in the past three years、No major changes in senior management，The actual controller has not changed。” According to the above provisions，To increase capital and expand shares for the purpose of listing，The actual controller of the company cannot change，No major changes in management，The main business cannot undergo major changes，So as not to affect the company’s listing process。
3、According to the provisions of Article 35 of the Company Law，When a limited liability company increases capital and expands shares，Shareholders have the right to give priority to subscribe for capital in proportion to their actual capital contribution.；certainly，All shareholders may agree not to give priority to subscribe for capital in proportion to their capital contribution.。 at last，a reminder，If you don’t know this aspect，You can consult Hong Kong Information Communication -。
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