Capital impairment
Topic: Finance
From Handwiki - Reading time: 1 minShort description: Corporate law: reduction of capital below legal minimum
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Capital impairment is the case when the company lost its asset, so the asset is lower than the stock of a company. One way to avoid capital impairment is reduction of capital without any compensation. Impaired capital may occur when a company incurs losses that result in negative retained earnings, also referred to as a retained deficit. Retained earnings can be reduced by dividend distributions; therefore, excessive dividend payments may contribute to a negative balance. In some jurisdictions, incorporation laws restrict companies from issuing dividends until any retained earnings deficit is resolved.[1]
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Original source: https://handwiki.org/wiki/Capital impairment
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Original source: https://handwiki.org/wiki/Capital impairment
Status: article is cached
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