Rich Dad’s Financial IQ Cultivation: Stock Fundamentals

Chapter 7 Basic knowledge of joint-stock companies (3)
If shareholders do not agree to participate in the merger, they can object or abstain from voting at the general meeting of shareholders, and request the company to buy their shares at the market price.The procedures are generally: (1) before the shareholders meeting is convened, shareholders raise objections in writing or orally to the company merger contract submitted by the board of directors; A written request that records the type and amount of shares; (2) If the shareholder and the company have reached an agreement on the share price, the company should pay the price within a certain period of time; if the two parties fail to reach an agreement on the price, the shareholder can request the court to rule that the company shall Awarded for cash payment.

(Section [-]) Dissolution and liquidation of joint-stock companies

The dissolution of a joint-stock company is a legal procedure for the cancellation of the company's legal personality and a legal fact for the termination of the company's business operations.After the company is dissolved, the company's legal personality does not disappear immediately, and it has to go through liquidation procedures.The liquidation of the company is the process of liquidating the company's property, collecting creditor's rights, repaying debts, and distributing the company's remaining property to shareholders after the company that has been dissolved ends all business operations.Only when the process of liquidation is completed, the company officially disappears.

There are several reasons for the dissolution of a company:
(1) The business operated by the company has been completed or cannot be completed, the company's articles of association stipulated that the cause of dissolution occurs, and the general meeting of shareholders resolves to dissolve.

(2) Merger, that is, newly established merger or absorbed in merger.

(3) Bankruptcy. When the company declares bankruptcy, the company should be dissolved immediately.

(4) The competent government authority announces the order to dissolve.

(5) The court ruled to dissolve the company.

There are two ways to dissolve a company: one is voluntary dissolution.This is primarily a voluntary dissolution at the company's own request.The other is forced dissolution.It is the forced dissolution of the company based on the law or the order of the competent authority.

The liquidation of a joint-stock company refers to the act of cleaning up and disposing of the company's assets, creditor's rights, and debt relationships in order to terminate various existing legal relationships and settle company debts during the dissolution process of the joint-stock company.According to relevant laws and regulations, in addition to dissolution due to merger and bankruptcy, other forms of dissolution must be carried out.This is because the rights and obligations of the company dissolved by merger have been transferred to the surviving company or the newly established company, so there is no need to liquidate.When a company is dissolved due to bankruptcy, the method of disposing of its property must be handled in accordance with the provisions of the Bankruptcy Law.After the company goes bankrupt, there will be no remaining property, because all the property is not enough to pay off the debts, so it is only to satisfy the interests of creditors, not the interests of shareholders.

Company liquidation can be divided into two types: one is ordinary liquidation; the other is statutory liquidation.Whether it is ordinary liquidation or statutory liquidation, the basic task and purpose is to close the company's existing business, collect creditor's rights, repay debts, and distribute remaining property, all under the supervision of the court.However, statutory liquidation is more strictly supervised by the court.

In the dissolution of a joint-stock company, the liquidator must first be determined, that is, the executor who is engaged in liquidation affairs and handles the company's property, creditor's rights and debts during the company's dissolution process.There are generally several situations for the formation of a liquidator: first, the directors of the company act as the liquidator; second, the company’s general meeting of shareholders elects the liquidator; third, the court appoints the liquidator.The main functions and powers of the liquidator are: (1) All property of the company is kept and controlled by the liquidator; (2) Deciding on the list of persons who are jointly and severally liable and making calls for the shares that should be called; Repay the debts in the correct order; (3) return the share capital to the shareholders, and if there is property, distribute it among those who deserve it.

The liquidator fabricated the accounting statements during the liquidation period and submitted it to the general meeting of shareholders for approval.Within a certain period of time after the general meeting of shareholders approves the accounting records, the liquidator applies to the court for registration of the liquidation termination.Once the court approves the liquidation termination registration, the liquidation procedure will come to an end and the company's legal personality will disappear.

(Section [-]) Significance of Implementing Shareholding System

The classic theory of Marxism holds that the shareholding system is a sublation of capitalism and a transition point from capitalism to socialism. It is not capitalist in itself, and it can be used by capitalism as well as by socialism. use.The reason why joint-stock companies appeared in capitalism is to meet the needs of capital socialization and production socialization, and to promote the development of capitalist social economy.The trial implementation of the joint-stock system under the conditions of socialism can expand the position of public ownership, gradually establish a modern enterprise system, and promote the continuous development of the socialist economy.

At present, the situation facing my country's economic development is still relatively severe, the problem of market weakness has not been fundamentally resolved, the price stability is supported by financial subsidies, the industrial growth rate is maintained by bank loans, and there is a surplus of money and a shortage of funds (due to due to credit specifications).By issuing stocks and bonds, enterprises can directly raise funds from the market, which can reduce the pressure on banks' capital supply, and can also divert part of savings deposits and directly convert them into funds needed for production and construction.Although the current enterprise contract system has a certain role in promoting production, it has not fundamentally solved the problems of the self-discipline mechanism and self-development ability of enterprises. Therefore, the implementation of the joint-stock system is still a topic to be discussed in strengthening enterprise reform.

The current conditions are the best time to try out the joint-stock system. The reasons are: (1) Due to the impact of Shenzhen's "stock fever", the people's financial awareness and investment awareness, especially the awareness of stock investment, has been greatly enhanced. (2) The market weakness faced by the current economic development is, in the final analysis, a weak product structure. Through the development of the stock market, according to the requirements of the national industrial policy, timely inject funds into the enterprises that adjust the industrial structure and product structure , so as to speed up the pace of adjustment and promote sustained, stable, and coordinated economic development; (3) At present, there is a considerable amount of hot money in the society looking for a way out. Of course, part of it can be absorbed through banks, but there is still a considerable amount of hot money waiting to move .The amount of self-owned funds of enterprises and cash held by residents is quite considerable. If the stock market can be developed in a timely manner, the functions of market financing and capital proliferation can be fully exerted, and the "introduction of foreign capital without borrowing, attracting domestic capital without increasing domestic debt" can be achieved. In order to promote the pace of financial reform, it can effectively control the investment of extra-budgetary funds, guide residents' consumption, and use part of the consumption funds to accumulate funds and raise more construction funds; Investment risks disperse the risks borne by the country in the past to all shareholders, effectively avoiding large fluctuations in the economy and maintaining the steady development of the economy.

Our country is in the primary stage of socialism, and the development of joint-stock companies is of great significance to the improvement of socialist production relations and the further development of social productivity, mainly manifested in:

1. Expanded corporate autonomy.Socialist enterprises implement the shareholding system, realizing the separation of enterprise ownership and management rights.The state is only one of the owners of enterprises and no longer holds all the means of production.Collectives, individuals, and foreign investors can all become part owners of an enterprise.Shareholders have the right to participate in the operation and management of the enterprise, the board of directors is responsible for making major decisions on the investment and development direction of the enterprise, and the daily work is handed over to the director (manager) elected by the board of directors.The employee's shareholding will directly combine the ownership with the laborer, the purpose of labor will be clearer, and the enthusiasm will be greatly improved.In this way, the shareholding system changes the original administrative relationship between the state and enterprises into an economic restriction relationship by decentralizing ownership.As the autonomy of the enterprise expands, the vitality of the enterprise will inevitably increase.

2. Joint-stock companies are an effective way to raise social funds.In the primary stage of socialism, the problem of shortage of funds will not disappear, and it is already difficult to meet the funding needs of production and construction by relying on finance and banks alone.It is of great significance to alleviate the shortage of funds by raising funds through shares, asking for funds from the society, and changing the situation of indirect financing by a single bank in the past.

3. Joint-stock enterprises mainly rely on issuing stocks to raise funds for production activities.The subscription of stocks is not restricted by region, urban and rural areas, public and private, internal and external, and depends entirely on the free choice of investors.The purpose of investors is to obtain more dividends and bonus income.Undoubtedly, the stocks of well-managed and profitable companies will be favored, and a large amount of funds will flow into advanced companies, which will encourage advanced companies.The dividends and bonuses of the stocks of advanced companies are higher than those of ordinary companies, so there are many investors, and the newly issued stocks are also easy to sell.If the stock is sold smoothly, its stock price will rise in the stock market, and the assets of shareholders holding the stock of the company will increase, which will in turn improve the status and reputation of the company and strengthen the competitiveness of its products.

4. The organizational form of the general meeting of shareholders and the board of directors is a good form of democratic management of enterprises.Shareholders participate in business decision-making and decide on leadership candidates.They can select people who are proficient in business and have talents to serve as the leaders of the enterprise, so as to ensure that the operation method of the enterprise is right and the operation effect is outstanding.

5. The shareholding system can promote the lateral flow of talents.Managers and scientific and technological personnel with knowledge and business ability can easily realize their desire to work in promising enterprises.Advanced enterprises will be strengthened in terms of talents and manpower.After the shareholding system was implemented, the horizontal exchange of technology developed.New technologies and new inventions are willing to be promoted in advanced enterprises, and advanced enterprises also have the conditions and ability to purchase new technology patents, so that enterprises can obtain the support of new technologies.

6. The form of joint-stock company is conducive to mobilizing the enthusiasm of enterprise employees, enterprise owners and managers.The income of the employees of the joint-stock company is directly linked to the company's operating results, so that the enthusiasm of the employees of the enterprise can be fully mobilized.The property of a joint-stock enterprise is the common property of the shareholders. All parties to the shares, that is, the owners, will care about the company's operation from their own interests.Since joint-stock enterprises have realized the separation of enterprise management rights and management rights, enterprise managers have the autonomy to make business decisions, and managers implement an appointment system, which greatly strengthens their sense of responsibility and enthusiasm.

(Section [-]) Shareholding System Transformation of Enterprises

State-owned enterprises implementing the joint-stock system must proceed from reality to clarify the necessity, purpose and possibility of implementing the joint-stock system in state-owned enterprises.Pay attention to the following issues:

1. Steps for demutualization of state-owned enterprises
The shareholding reform of state-owned enterprises generally goes through 12 stages: (1) formulate the draft articles of association of the joint stock company; (2) clean up fixed assets and convert shares; (3) formulate the draft prospectus; (4) Formulate the draft of the earnings system; (5) Formulate the draft of the stock generation and management system; (6) Convene the sponsor meeting, confirm the shares and pay the share capital; (7) Appoint directors (8) Convene a shareholder meeting, elect the executive director, and approve the company's articles of association, system management policy and medium- and long-term development plan; (9) Formally establish the board of directors and pass the board of directors' articles of association; (10) Department The manager takes office and announces the list of the company's organization and its responsible person; (11) Report to the industrial and commercial management department for registration.Business begins after registration.

2. Appraise the original assets
When an enterprise of the whole people engages in a joint-stock system, it generally needs to clean up and evaluate the original assets of the enterprise first, and then make a price for the shareholding.At this stage, there are generally four methods for evaluating the original assets of enterprises in various places: (1) calculation based on the original value of fixed assets; (2) calculation based on the net value of fixed assets; (3) calculation based on replacement value; (4) calculation based on the weight Set full value less depreciated value calculation.In addition to factory buildings, general equipment,

Fixed assets and current assets such as special equipment can be purchased at a discount, and intangible assets such as technology, trademarks, and brand reputation can also be purchased at a price.

At present, there is no method in our country that can scientifically evaluate the original assets of enterprises, especially the division of state shares and enterprise shares within a national enterprise is more difficult.Judging from the current pilot situation, most of the representative institutions of state shares are local financial departments.If the financial department is unable to manage the state shares of all state-owned enterprises, it entrusts the original competent department to manage it.The representatives of state-owned shares appointed by the competent department ˉ ˉ directors are basically considered in the original leadership team of the enterprise.In some joint-stock enterprises, the directors of the joint-stock enterprises are concurrently held by the factory directors of the joint-stock enterprises, and the chairman of the board of directors is served by the factory directors of key enterprises.There are also some enterprises that implement the internal joint-stock system, and the chairman of the board is concurrently held by the secretary of the party committee.With such a management form and cadre allocation method, it is difficult to separate ownership and management rights and to separate government from enterprises.Who should be in charge of the national share?From Shenzhen's experience, it is better for an investment management company to take the post.

3. Determine the share composition
The shares of state-owned enterprises are generally divided into state shares, unit shares and individual shares according to the investment subject (equity owner). (1) National shares.In practice, there are three situations. One refers to the shares of enterprises owned by the whole people originally formed by the state investment in fixed assets, working capital allocated by the state and special funds; Investment or shareholding; the third refers to the shares converted from the fixed assets of the enterprise formed by the overall planning funds of the original administrative company. (2) Unit shares.This kind of shares is divided into two categories: one category refers to the shares formed by the company's own funds, that is, the assets formed by the accumulation of profits over the years, and the national enterprise includes production development funds, new product development funds, collective welfare funds, employee rewards Funds and reserve funds, collective enterprises are provident funds and public welfare funds; the other category refers to shares subscribed by other units (all people, collective enterprises and institutions) with their own funds. (3) Individual shares, also called private shares.According to the classification of equity owners, it can be divided into two categories: one is the shares subscribed by internal employees of the enterprise; the other is the shares that the enterprise recruits from individuals in the society.According to the degree of freedom of the shares, they can be divided into two types: basic shares and floating shares.The so-called basic shares, which are long-term shares purchased by employees of the enterprise on a "capital basis", cannot be withdrawn freely.This kind of share has a certain degree of compulsion.For example, "capital with labor" shares or "capital with labor" shares are only allowed to withdraw shares when employees retire, transfer (including dismissal) or die; the so-called floating shares refer to shares that employees voluntarily subscribe for Shares can be withdrawn after withdrawal or a limited period (one to two years, two to three years).

To determine the share composition of the enterprise, one is to determine whether to set up individual shares, and the other is to determine the proportion of various types of shares.On this issue, there are still different views, and the actual practice is also inconsistent.It is generally believed that state shares should account for a relatively large proportion of large and medium-sized state-owned enterprises; while general small state-owned enterprises implement shareholding, state shares do not necessarily account for a large proportion, or there is no state share, only collective shares and individual shares. shares.

The main forms of the joint-stock system in state-owned enterprises are: (1) Mutual shareholding among enterprises.This is a production and management association formed by mutual "shareholding" of production factors among enterprises in a horizontal economic alliance.There are four basic forms of shareholding: one is to discount fixed assets such as equipment and workshops (estimated at an important price) to buy shares; Industrial property rights such as patents and trademarks are converted into shares and invested in joint ventures; fourth, direct investment in shares is based on natural and economic advantages. (2) The company's funds are converted into shares, and internal employees or individuals who are not employees of the company are absorbed into the shares.At present, most of the state-owned enterprises have adopted the method of employees' internal shareholding. This method can concentrate a part of it for production, and it should be allowed in principle.As for some companies indiscriminately issuing bonuses in the name of internal fundraising, that is another problem. (3) Jointly invest in various aspects to expand the production capacity of famous and high-quality products and marketable products. (4) Absorb Hong Kong, Macao, overseas and foreign funds to invest in shares.

(End of this chapter)