Surplus reserves are divided into two types:
The first is the statutory surplus reserve. The statutory surplus reserve of listed companies shall be drawn at 10% of after-tax profits, and shall not be drawn when the cumulative amount of statutory surplus reserve reaches 50% of the registered capital.
The second is the discretionary surplus reserve. Arbitrary surplus reserve is mainly drawn by listed companies according to the resolution of shareholders' meeting. The difference between statutory surplus reserve and arbitrary surplus reserve lies in the different basis of their respective provision. The former is extracted according to national laws or administrative regulations; The latter is extracted by the company itself.
In the past, there was also a public welfare fund in the surplus reserve, which was specially used for the expenditure of welfare facilities for employees of enterprises, such as the purchase and construction of dormitories, nurseries and barber shops. Not now.
The surplus reserves of foreign-invested enterprises include:
(1) reserve fund. Refers to the provident fund drawn from net profit in accordance with national laws and regulations and approved for making up losses and transferring capital.
(2) Enterprise Development Fund. Refers to the provident fund drawn from net profit in accordance with the provisions of national laws and regulations, which is used to develop enterprise production and approved to develop enterprises and increase enterprise capital.
(3) Return the profits to the investment. Refers to the Chinese-foreign cooperative enterprise's return of investors' investment with profits in accordance with regulations during the cooperation period.