Answer questions regarding the legal reserve when appropriating retained earnings
Answer questions regarding the legal reserve when appropriating retained earnings
Definition of Establishment of Statutory Reserve
The establishment of a statutory reserve is one of the methods for setting aside provisions when distributing retained earnings. In which the Civil and Commercial Code, Section 1202 states, “Every time there is a resolution of the shareholders to declare a dividend payment. The company must allocate retained earnings as a reserve fund at least 5% of the annual net profit. until the reserve This profit comes from 10 percent of the registered capital or more according to the Articles of Association of the Company.”
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