Growth funds refers to a fund that pursues long-term appreciation of fund assets and invests in company stocks with high credit and good long-term growth prospects or long-term surplus funds.

Excess function

Surplus reserve refers to all kinds of accumulated funds extracted from net profit by enterprises in accordance with regulations. Surplus reserve is different from capital reserve, which is obtained from net profit. The formation of capital reserve has its specific sources and has nothing to do with enterprise net profit.

Surplus reserve is divided into public welfare fund and general surplus reserve according to different purposes. The public welfare fund is specially used for the expenditure of welfare facilities for employees of enterprises, such as the purchase and construction of dormitories, nurseries and barbershops. According to the current system, the company-owned enterprises draw the statutory public welfare fund at the ratio of 5% to 10% of after-tax profits.

General surplus reserve is divided into two types: one is statutory surplus reserve. The statutory surplus reserve of a company-based enterprise shall be drawn at 65,438+00% of the after-tax profit (non-company-based enterprises may also draw at a ratio of more than 65,438+00%), and it may not be drawn again when the accumulated amount of statutory surplus reserve reaches 50% of the registered capital. The second is the discretionary surplus reserve. Any surplus reserve shall be withdrawn by the company system according to the resolution of the shareholders' meeting.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, while the latter is extracted by enterprises themselves.

The surplus reserves extracted by enterprises are mainly used in the following aspects:

(1) make up the loss. If the enterprise loses money, it should make up for it. There are three ways to make up for the loss: one is to make up for it with the pre-tax profit of the following year. According to the current system, enterprises can make up for losses with pre-tax profits realized in the next five years. The second is to make up for it with after-tax profits in the following years. If the losses incurred by the enterprise are not fully compensated within five years, the uncompensated losses shall be compensated by the profits after income tax. The third is to use surplus reserves to make up for losses. 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) capitalization. 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.

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 not be used to distribute profits or dividends to investors in general. The use of surplus reserve does not refer to its actual occupation form, and the extraction of surplus reserve does not refer to extracting this part of funds from the capital turnover process of enterprises alone. The surplus reserves extracted by enterprises, whether used to make up losses or to increase capital, are only the transformation of the internal structure of enterprise owners' rights and interests. For example, enterprises use surplus reserves to make up for losses, which actually reduces the amount of surplus reserves to make up for uncompensated losses, and does not cause changes in the total amount of owners' equity. When an enterprise converts surplus reserve into capital, it only reduces the balance of surplus reserve and increases the amount of equity of the enterprise, and does not cause the change of the total owner's equity. As for the surplus reserve balance of an enterprise, it is actually only an integral part of the owner's equity of the enterprise, indicating that it is only a source of enterprise funds, and the assets formed by it may show certain monetary funds or achievements.