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Corporate Service - China

Question

Q&A of The Company’s Equity Transfer I

Answer
Nowadays, with the development of financial concepts, many people begin to invest, and the forms of investment are becoming more and more diversified. But the company's operating conditions are earnings and risks coexist, there is also force majeure, this kind of situation will appear shareholders transfer equity phenomenon. Today we would like to introduce the share transfer in companies.

Q:
What form does company equity transfer have?
A:
There are two ways for shareholders of a limited liability company to transfer their capital contribution. First, the company's internal equity transfer, that is, shareholders will transfer equity to other existing shareholders. Second, the company's external equity transfer, that is, shareholders will transfer equity to other investors other than existing shareholders.

Q:
What kind of tax should company equity transfer pay?
A:
If the transferor is an individual, it shall pay individual income tax and stamp duty.
If the transferor is an enterprise, it shall pay enterprise income tax and stamp duty.

Q:
What specific process does company equity transfer have?
A:
  • Obtain the Application Form for Company Change Registration (to be obtained from the window of the Certificate handling Hall of the Industrial and Commercial Bureau)

  • Change the business license (fill in the company change form, affix the official seal, organize the amendment to the Company's Articles of association, resolution of the board of shareholders, equity transfer agreement, the original and copy of the company's business license to be handled in the certificate handling hall of the Industrial and Commercial Bureau)

  • Change the organization code certificate (fill in the enterprise code certificate change form, stamp the official seal, sort out the change notice of the company, the copy of the business license, the copy of the enterprise legal person ID card, the original of the old code certificate to the Bureau of Quality and Technical Supervision) 
            
  • Change the tax registration certificate (take the tax change notice to the tax bureau for handling)

  • Change the bank information (take the bank change Notice to the basic account opening bank for handling)

Q:
What does company equity transfer need to pay attention to?
A:
After the completion of equity transfer, the original shareholder's capital contribution certificate shall be destroyed, the new shareholder's capital contribution certificate shall be added, and the relevant data of shareholders in the articles of association and the register of shareholders shall be amended. After the equity transfer, the equity should be changed in time. The qualification or identity certificate of the new shareholder and the revised articles of association shall be submitted when the change is registered.

Q:
How long is the registration period of company equity transfer?
A: If the company changes its shareholders, it shall go through the alteration registration with the industry and Commerce Department within 30 days after the change.

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