Pursuant to the current People’s Republic of China Company Law, Chaoda is required to transfer between 5% to 10% of its profit after taxation to a statutory reserve until the surplus reserve balance reaches minimal 50% of the registered capital. For the purposes of calculating the transfer to this reserve, the profit after taxation shall be the amount determined under the People’s Republic of China accounting standards. The transfer to this reserve must be made before the distribution of dividends to the shareholders.
the statutory reserve have been idle at $2,659,935 for the past 3 years, if Jiameng don’t even bother follow chinese law. What chances is he going to pay a dividend?
if the company has been profitable, why is it not transferring profit to the statutory reserve?
