Home /

Reserva Legal Que Es

Since they do not constitute share capital as such, reserves are considered profits, which are included in the company`s own funds as passive capital, although they must have a counterpart in the assets. This means that they are part of the financing of the company as such and therefore cannot be sold for distribution as dividends, except in certain special cases. In addition to the statutory reserve, there are statutory reserves that the company has taken into account in its articles of association or articles of association. The legal reserve can only be used for legal provisions, and this only allows its use to eliminate losses, as stated in Article 456 of the Commercial Code: the legal reserve is the mandatory part of the profits that must be accumulated. It is not possible, except to have compensation for negative exercises. Therefore, the statutory reserve is based on profits made over the years and is calculated after amortization of contributions for officers, directors, etc., social security contributions and other business costs, as well as©financial and business expenses and expenses. It should be noted that the minimum amount of the legal reserve is 50% of the subscribed capital, since the company has the authorized, subscribed and paid-up capital. This means that, according to the law on capital companies, 10% of our profits must go into the coffers of the so-called statutory reserve, which must have a size of 20% of the share capital. The legal reserve is a type of regulation in some companies, which is used in commercial law as a legal guarantee for the activities and operations carried out by the company, in the event that it is not responsible for it or must compensate its creditors for defaults or other economic and financial liabilities. According to the information given above, the legal reserve account must reach 20% of the company`s share capital, so the calculation: 2,000,000 x 20% = €400,000 would result in a shortfall of €150,000 to reach this 20%.

Indeed, it is not possible to charge more than what is required by law, and the law only requires a reserve of up to 50% of the share capital. Since the profit for the year is creditable, it is debited when the funds are withdrawn in order to transfer them to the reserve account, which is also creditable. The company may take this surplus and establish or increase a statutory or occasional reserve or distribute it as a dividend to shareholders. It is therefore very important that the company concerned makes the appropriate entries with regard to the legal reserve. In particular, when drawing up this note, the benefits obtained during the corresponding year are identified and it is then specified what is the amount corresponding to the legal reserve of 10%. It should be noted that the law only requires that the reserve be created up to the equivalent of 50% of the share capital, then, once the amount is reached, it is no longer mandatory to continue the creation of reserves, and if this minimum amount is exceeded, the company can freely dispose of this surplus. The law does not distinguish between the type or category of companies, so that whatever it is, by the mere fact that it is foreign, it must constitute the legal reserve under Article 452 of the Commercial Code. Thanks to the legal reserve, bank customers are better protected. If a bank is unable to meet its obligations due to its commitments, the legal reserve is a safe haven for bank users to access their money.

In particular, all these facts and figures must be clearly indicated in the company`s accounting book. It should also be pointed out that the rest of the benefits that are not intended to fill this legal reserve item can be used, for example, for so-called voluntary reserves or for distribution among the persons in the company who have shares. In this case, the amount of $28,715.00 will be deducted from the 2019 result to increase the legal reserve, with which it will have an amount of $60,000.00, representing one fifth of the share capital of the Company. In the following text you will find everything you need to know about the legal reserve, what percentage they are formed, how the value of each individual reservation is determined, what maximum limit they must comply with and to what extent they can be used. The purpose of the legal reserve is therefore to protect the share capital against possible losses. Companies cannot freely dispose of these reserves or use them as they wish, but their sole purpose is to respond to losses. This type of reserve is a subset that belongs to a broader category of reserves from companies` retained earnings and also©includes special, statutory and voluntary reserves, to name a few. The common feature of these categories is that they arise from the economic benefits of the company`s activity: that is, if this year`s result shows a positive balance. For example, if the share capital of the corporation is $100,000,000 and the legal reserve has accumulated $70,000,000, it means that the corporation has a legal reserve $20,000,000 higher than required by law, so you can take that $20,000,000 and give it the use intended by the meeting. In this case, we see that of the profit of € 1,000 obtained, 10% goes to the legal reserve and the rest is intended to cover a previous negative year. The legal reserve covers losses if there are no other reserves for this purpose; The legal reserve is mandatory in joint-stock companies in accordance with the provisions of Article 452 of the Commercial Code, a situation that is not based on the simplified joint-stock company, since in this type of company the creation of the legal reserve is optional for the partners. Thus, the legal reserve of the company in this case is $ 1000, which must be accumulated on the basis of this reserve in order to increase the impact share compared to a possible negative year.

If the company does not make a profit that year, it would not be obliged to put anything in the reserve account. Companies that are not legally required to set up a legal reserve may be taken into account in the articles of association. The account allocated to the legal reserve would reach €300,000 (€250,000 + €50,000). If the company does not generate profits in a year or year, it is not obliged to allocate funds to the legal reserve, because this legally required 10% is attributable to liquid profits and these cannot exist in case of losses. The purpose of the reserve is to protect the assets of the company, so it cannot be used other than in this eventuality or eventuality. Imagine that a joint-stock company has a share capital of € 2,000,000 and that its legal reserve reaches an amount of € 250,000 at that time. At the end of the current year, the company made a profit of 500,000 euros. How much should I transfer to the legal reserve if I apply the legal minimum of 10%? `The losses shall be offset by the reserves set aside for that purpose and, failing that, by the statutory reserve. Reserves intended to absorb certain losses may not be used to cover other losses unless the assembly so decides.

“Foreign companies with permanent activities in Colombia shall constitute the reserves and regulations required by the law of national public limited companies and must comply with other requirements established for their control and supervision.” It is important to note that if the legal reserve is distributed for purposes other than its capitalization, the manager can repeat to shareholders the value of what is delivered to them, and Colombian commercial legislation requires that a reserve be constituted with 10% of the liquid profits of the company until the equivalent of 50% of the subscribed share capital is reached. Reserves may exceed this 50%, which corresponds to exceeding the legal minimum reserve. If we want to take into account an increase in the legal reserve, it would be that: With regard to the registration of the legal reserve, it is part of the inheritance, more precisely in the 330505 account according to the Colombian uniform chart of accounts. Legal reserve is a type of fund or savings that companies or corporations are legally required to create in order to protect the inheritance.