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Simple English definitions for legal terms

restricted surplus

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A quick definition of restricted surplus:

Restricted surplus is a type of surplus that has limitations on how it can be used. It is usually a portion of the company's retained earnings that cannot be distributed as dividends due to preferred dividends in arrears, a covenant in a loan agreement, or a decision made by the board of directors. In simpler terms, it's like having extra money, but you can't spend it on whatever you want because there are rules on how it can be used.

A more thorough explanation:

Definition: Restricted surplus is a surplus with a limited or restricted use. It is the portion of retained earnings that cannot be distributed as dividends. The restriction is usually due to preferred dividends in arrears, a covenant in a loan agreement, or some decision of the board of directors.

  • If a company has $100,000 in retained earnings, but $20,000 of it is restricted surplus, the company can only distribute $80,000 as dividends to its shareholders.
  • A company may have a loan agreement that restricts the use of retained earnings until the loan is paid off. In this case, the portion of retained earnings that is restricted would be considered restricted surplus.

These examples illustrate how restricted surplus is a portion of retained earnings that cannot be distributed as dividends due to certain restrictions or agreements. It is important for companies to keep track of their restricted surplus to ensure they are not violating any agreements or covenants.

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Dkk
13:29
I'm at your mommas house rn: https://x.com/Mansavelli_/status/1648073454665572352
triplethread
13:29
im addicted to reacting to all of the decisions
triplethread
13:29
with the emojis
HopefullyInLawSchool
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I shop at Joe
HopefullyInLawSchool
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Joe's
glovediedthisishismom
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i shop at tawget
glovediedthisishismom
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im dawk gawthic maga
triplethread
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i shop at giant eagle
ForDizzyDJoy
13:31
How did i miss Fordham and American’s wave and I applied in september 🙃
13:33
Lol UC Davis took me of ED and put me in RD
13:34
surprised I didnt get straight denied
HopefullyInLawSchool
13:34
they emailed you/
HopefullyInLawSchool
13:34
?
13:35
@HopefullyInLawSchool: Yea, I just got it
i just want a cornell ii :(
13:37
yak you will be fucking shit up at cornell this time next year dw
i love u
13:38
love you too bby
glovediedthisishismom
13:42
what if desantis appoints lara trump and matt gaetz to be floridas senators
Dkk
13:42
Sounds good to me
HopefullyInLawSchool
13:43
@glovediedthisishismom: What if he appoint Ym instead?
HELP
every damn opportunity
13:47
do schools straight reject people from ed or to they always ed-rd if its a no for ED?
HopefullyInLawSchool
13:48
Some schools rject
13:49
Thanks! I couldn't find any reddit thread about it lol
13:49
but just means now I have to wait for the rejection from Davis
glovediedthisishismom
13:53
i just wanna rock
glovediedthisishismom
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bodyadaya
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let it rock
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