1. Provident fund

Provident fund, also known as the company's reserve fund, refers to a kind of money that the company draws from the company's profits according to law in order to enhance its own property capacity, expand production and operation and prevent unexpected losses, and does not serve as part of the income or income from dividend distribution. Mainly used for: making up the company's losses, expanding the company's production and operation, and increasing the company's capital.

II. Capital accumulation fund

Capital accumulation fund is a kind of accumulation fund that can be converted into capital according to legal procedures, and it can also be said to be a kind of quasi-capital, which is an integral part of the owners' rights and interests of enterprises. Its main sources include: capital premium and stock premium in which the actual amount of investment paid by investors exceeds their capital; Accepting donated assets; The revaluation and appreciation of legal property, that is, the part where the appraised and confirmed value of assets or the agreed value in contracts and agreements exceeds the original net book value; Capital exchange rate conversion difference, etc. The capital reserve obtained by an enterprise shall be accounted for in the subject of "capital reserve", and detailed accounting shall be made according to the source of the formation of capital reserve. Net assets are the difference between assets minus liabilities, including capital reserve.

III. Statutory reserve fund

Statutory reserve fund is required to be withdrawn according to the law, and consists of statutory surplus reserve fund and capital reserve fund. When the company distributes the after-tax profits of the current year, 1% of the profits shall be included in the company's statutory reserve fund. If the accumulated amount of the statutory common reserve fund of the company is more than 5% of the registered capital of the company, it may not be withdrawn.

the company's common reserve fund is a fund whose net assets exceed the received share capital and accumulated in the company for a specific purpose. The function of provident fund is to increase the company's capital, consolidate the company's property base and improve the company's credit. Provident fund does not constitute the company's share capital, but its function is similar to the share capital, so it is called "additional share capital", which together with the share capital constitutes the company's own capital. Provident funds can be divided into statutory provident funds and arbitrary provident funds according to whether their accumulation is compulsory by law; According to the different sources of accumulation, it can be divided into surplus reserve fund and capital reserve fund.

Classification standard:

1. According to whether the fund is drawn by force according to the law, the fund can be divided into statutory fund and arbitrary fund.

the statutory provident fund refers to the provident fund that must be drawn by force according to the law. The proportion (or amount) of its extraction and its use are directly stipulated by law. Statutory provident fund is also called "compulsory provident fund".

Arbitrary accumulation fund refers to the accumulation fund freely set up or withdrawn from the statutory accumulation fund by the company according to the articles of association or the resolution of the shareholders' meeting. Therefore, whether to set up any provident fund and how to withdraw and use it is entirely up to the company to decide freely, and the law does not interfere.

2. according to the source standard of provident fund, the provident fund can be divided into surplus reserve fund and capital reserve fund.

surplus reserve fund refers to the reserve fund drawn by the company from its after-tax operating profit. Therefore, its source is unique, that is, it can only come from the company's surplus.

the capital accumulation fund refers to the accumulation fund drawn from the income generated by the company's non-business activities.

References: China Government Information Network-People's Republic of China * * * and Company Law of China.