On the basis of that premiss, it should be recalled that the various commercial rules have laid down certain rules for the exercise of legal reserves, depending on the nature of the entity concerned. For example: the legal reserve in accordance with Article 229 of Law No. 26887, General Companies Law; It may have an upper limit of 20% of the share capital. To comply with their legal obligation, EIRLs must take into account that the amount at which they must make the reservation is the net profit after©profit sharing (if applicable) and income tax. HOW IT IS CALCULATED: When calculating the legal reserve of commercial companies, the annual profit minus the annual tax should be taken as a basis. The reserve requirement ratio is 5%. The minimum amount of the statutory reserve account must be 20% of the subscribed share capital. Once this amount is reached, there is no need to increase the fund further, that is, it will not be necessary to charge it more. If no profit is made, the legal reserve does not have to be calculated. This reservation may not contain any provision other than that established by law, which stipulates that it will be used to eliminate losses. In the event of a surplus of the legal reserve, i.e.
if it exceeds 20% of the subscribed share capital, the excess amount may be used freely, even if it is distributed among the partners. Net profit: S/ 39,385.08 x 10% = S / 3,938.51 (statutory reserve for 2015)Statutory reserve for previous years = S/ 30,000.00Total = S/ 33,938.51 (accumulated legal reserve)Capital: S/ 250,000.00 x 20% = S / 50,000.00 59 Cumulative results 10,000,591 Retained earnings 5911 Cumulative profits58 Reserves 10,000,582 Legalx/x for the deduction of the legal reserve of retained earnings Finally, the legal reserve can be capitalized, increase the capital of the company; And this in itself is a prerequisite for it to have reached its ceiling so that capital premiums can be distributed. Reserves are very important for companies because they strengthen their wealth in the face of future unforeseen events. Indeed, the amounts reserved can be used to cover losses©, their capitalization or other options deemed appropriate. That it has as a limit the fifth part of the capital, which does not have the condition of the legal reserve, in other words, the accumulated legal reserve may not exceed (20%) of the subscribed capital. In this case, the accumulated legal reserve does not exceed 20% of the capital. QUESTIONS: I am a partner and shareholder of a joint-stock company (SA) and a limited liability company (SRL) dedicated to trading in general, I would like to know what the legal reserve is for. How is this done? Is there a legal provision in this regard and is it mandatory to have it in the assets of the company? It is also known that there is a legal reserve from previous periods for S/000 30,000. Now make the calculation of the legal reserve for the period 2019 according to the data presented below: If this condition is met, they are obliged to deduct at least ten percent (10%) of these benefits to form a statutory reserve fund until it reaches one-fifth of the capital.
There is an obligation to allocate at least 10% of each year`s distributable profit, less income tax, to “statutory reserves”. Net income of S/ 42,659.08 (statutory reserve for 2018). Legal reserve of previous years = S/ 29,365.58.Share capital of S/ 460,000.00. The amount exceeding this limit does not have the status of legal reserve. Similarly, for the creation of this account, there is an obligation to allocate to it at least ten percent of the distributable profit of each year less income tax. The legal reserve represents the profit(s) distributed, whatever their nature, which are excluded from distribution and are allocated to a specific future use, thus giving the company greater economic and financial strength. With regard to legal (mandatory) reserves in limited liability companies (EIRLs), it should be recalled that Article 64 of Legislative Decree no. 21621 provides that EIRLs that receive liquid benefits exceeding seven percent (7%) of the principal amount of the financial year are required to deduct at least ten percent (10%) from these benefits. to set up a statutory reserve fund until it reaches one-fifth of the capital. That article adds that this reserve fund may be used to cover the debit balance of the profit and loss account only that in which that debit balance appears and must be replaced if it falls below the level indicated.
Legal reserves in sole proprietorships with limited liability (E.I.R.L.) All bookings are more or less owned by volunteers, that is, it is an option of the company or its owners. According to the calculation, the profit made by INTACAMA EIRL does not exceed 7% of the capital. Therefore, it is not mandatory to make the legal reserve. The statutory reserve is a fund that companies or companies are legally required to establish. On the one hand, the mandate derives from the statutes themselves which, in their statutes, determine the use of profits and allocate the mandatory percentages for the various reserves. On the other hand, according to Art. In accordance with Article 91 of Law 1034/83, each company is required to allocate 5% of the legal reserve to the net profit after tax, up to a maximum of 20% of the subscribed capital. The purpose of the legal reserve is to protect the share capital against possible losses. Companies cannot freely dispose of these reserves or use them for whatever they want, but their only purpose is to meet them. The legal reserve applies to capital companies, limited liability companies and simplified joint-stock companies, regardless of the nature of their activity. For financial institutions and cooperatives, the rules and rates are different.
If this is the case, in the case submitted by the company MERCURIO EIRL, in order to determine whether the aforementioned reservation is necessary or not, we will make the following calculation: HOW AND WHEN DO I REGISTER? Although the provisions do not exhaustively specify when these reserves are to be determined and recorded, they occur at the end of each fiscal year in which the net of tax profit is generated. The LLC that has already agreed on the established legal booking commitment can do so at the beginning of the new cycle or period as it does not have a meeting. Public limited companies, on the other hand, may do so at the time when the meeting so decides. The accounting is carried out as follows: debit of the “Annual surplus” account with credit to the “Legal reserve” account. The legal reserve is an account with a balance that, together with the other reserves and results, forms part of the company`s assets. The legal reserve in Peru assumes that companies or corporations must allocate a certain percentage of their distributable profits to an account called a “legal reserve” so that if the company is at some point in deficit, this account can help cover them. As explained in our report, EIRL companies are only required to build up legal reserves to the extent that their annual profit exceeds seven percent (7%) of the capital. As is apparent from the foregoing, INTACAMA EIRL is bound only to the extent that the abovementioned ± condition is fulfilled. If this is the case, the following procedure must be carried out: Article 229 of the General Companies Act generally requires capital companies to deduct input VAT of at least 10%. The company Constrrucciones Unidas EIRL, which in May 2016 requested a legal reserve of the profit of the year 2015. What do you© think of our article? ©Let us know what you think.
Profit for the year after tax gs.
