When an enterprise uses the extracted surplus reserve to make up for losses, it shall be proposed by the board of directors of the company and approved by the shareholders' meeting.

2. Transfer capital.

When an enterprise converts surplus reserves into capital, it must be approved by the shareholders' meeting. When the surplus reserve is actually converted into capital, it shall be carried forward according to the original shareholding ratio of shareholders. When the surplus reserve is converted into share capital, the surplus reserve retained after the conversion shall not be less than 25% of the registered capital.

3. Dividend distribution.

The extraction of surplus reserves is actually a restriction on the distribution of profits to investors from the net profits realized by enterprises in the current period. The extraction of surplus reserve itself is a part of profit distribution. Once the corresponding funds are withdrawn to form surplus reserves, they shall generally not be used to distribute profits or dividends to investors.

Extended data

"The CSRC proposes a differentiated cash dividend policy? Encourage investors to participate in the profit distribution decision of listed companies.

Cash dividend of listed companies is a basic system of capital market, and it is also a problem of enterprise autonomy. From the perspective of financial theory and regulatory practice, the dividend system can effectively enhance the investment function and attractiveness of the capital market.

As an important way of investors' return, cash dividend often occupies a dominant position in mature markets. Throughout the practice of various countries, most mature markets implement the company's independent dividend policy, while emerging markets such as Brazil have adopted the compulsory dividend policy to varying degrees.

Influenced by many factors such as economy, system and financial environment, there are still some problems in cash dividends of listed companies in China, such as high concentration of cash dividends in a few high-quality companies, insufficient continuity and stability of dividends, higher dividend level of growing enterprises than mature enterprises, single dividend return method and unreasonable structure.

To this end, the CSRC has always paid attention to protecting the legitimate rights and interests of small and medium-sized investors. On the basis of fully respecting the autonomy of enterprises, combined with the standardized operation level of listed companies, cash dividends have been regarded as an important basic system construction of the capital market and have been making unremitting efforts. The "Guidelines for the Supervision of Cash Dividends" issued this time focuses on strengthening the supervision of cash dividends of listed companies from the following aspects:

First, urge listed companies to standardize and improve the internal decision-making procedures and mechanisms for profit distribution, and enhance the transparency of cash dividends.

The CSRC focuses on the company's articles of association and decision-making mechanism, encourages listed companies to clarify the priority order of cash dividends in profit distribution methods in the articles of association, and requires listed companies to fully listen to the opinions and demands of independent directors and minority shareholders when making dividend decisions. Supervise listed companies to further strengthen the rationality, stability and transparency of cash dividend policy and form stable return expectations.

Second, support listed companies to return investors in a differentiated and diversified way. Support listed companies to formulate differentiated cash dividend policies according to their own development stages and whether there are major capital expenditure arrangements. Encourage listed companies to repay investors by issuing preferred shares and repurchasing shares according to law, and support listed companies to repurchase shares when the share price is lower than the net assets per share.

Three, improve the dividend supervision regulations, strengthen supervision and inspection. Strengthen the supervision of companies that do not pay dividends according to the articles of association and companies that have the ability but do not pay dividends for a long time, and take corresponding supervision measures according to law.

Baidu encyclopedia-surplus reserve

People's Daily Online-CSRC proposes differentiated cash dividend policy.