Which of the following is the principle which places restrictions on the return of contributed equity to shareholders?
A)equity restriction
B)capital restriction
C)capital maintenance
D)none of the above

Question

Quizplus · Accepted Answer

The principle which places restrictions on the return of contributed equity to shareholders is known as capital maintenance. This principle ensures that the company's capital is preserved for its operations and is not distributed to shareholders in a manner that would impair the company's ability to meet its obligations. Capital maintenance can be achieved through various methods, such as the use of distributable profits or by issuing new shares to raise additional capital.

Which of the Following Is the Principle Which Places Restrictions