The distribution of profits is refers to the enterprise to achieve business results in accordance with the distribution form and the distribution order of the provisions of the national financial system, active segmentation and distribute between the state, enterprises and investors. According to the provisions of China's "company law" and other laws, the Limited by Share Ltd after tax profits shall be in accordance with the make up the losses of the previous year, the statutory surplus reserve, discretionary surplus accumulation fund, to the shareholders (investors) dividend (profit) of the basic procedures for distribution.

　　Determine the surplus distribution and retention policy is an important part of financial resource allocation, the organization should consider the proportion of retained earnings and dividends. Dividend volatility may reduce the confidence of investors, therefore the enterprise often to smooth dividend payment by changes in earnings. But how much to pay dividends to the shareholders in the decision, should also be considered in order to meet the financing needs of the amount of retained earnings. Retained earnings and dividend decisions typically requires, considering the future use retained the statutory requirements, the restriction of debt contracts, financial leverage, liquidity, debt repayment, signals and other factors. Generally speaking, the practice of dividend policy with a fixed dividend policy, fixed rate dividend policy, dividend policy and the zero residual dividend policy four categories. The provisions of relevant laws of China, the Limited by Share Ltd can only use cash dividend and stock dividend two assignment, and rarely assign property dividend and debt dividend.

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