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Those who can contribute to a company's reserve funds are the shareholders for that company. Often this means that the shareholders pay an extra amount on top of the price of the share they wish to purchase.

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What do you mean by reserve and Provision?

Reserve -The funds that a company sets aside to meet future unknown losses. Provision- the funds that a company set aside to meet future known losses


What is the use of capital redemption reserve?

A capital redemption reserve is a reserve created by a company to hold funds that are set aside for the purpose of redeeming or buying back its own shares. This reserve is typically established when a company repurchases its shares or when it reduces its share capital, ensuring that the company's capital remains intact and that shareholders are protected. The funds in this reserve cannot be distributed as dividends, as they are meant to maintain financial stability and comply with legal requirements regarding capital maintenance. Overall, it serves to enhance shareholder confidence and reinforce the company's financial structure.


What is amalgamation reserve?

Amalgamation reserve means the expenses bear by Transferee company for amalgamation with Transferor company is treated as reserve, this reserve is called as amalgamation reserve


Why Sinking Fund Reserve is a non distributable reserve?

A sinking fund reserve is considered a non-distributable reserve because it is specifically set aside for the purpose of repaying debt or replacing long-term assets, rather than for distribution to shareholders. This reserve is intended to ensure that funds are available when needed for significant financial obligations, thereby promoting financial stability and responsibility. By designating these funds for a specific purpose, it prevents their use for dividends or other distributions, safeguarding the company's long-term financial health.


What are the funds that banks use to satisfy the reserve requirement?

excess reserves

Related Questions

What do you mean by reserve and Provision?

Reserve -The funds that a company sets aside to meet future unknown losses. Provision- the funds that a company set aside to meet future known losses


What is revenue reserve and its example?

The revenue reserve is the retained earnings which are shown in the company's balance sheet as part of the shareholders' funds and are set aside to use to continue to pay dividends even if the company makes a loss. The example of the revenue reserve are the credit balance of the Profit and Loss Account, General Reserve and etc...


Where can banks in need of reserves borrow funds from, either from the Federal Reserve or in the federal funds market?

Banks in need of reserves can borrow funds from either the Federal Reserve or in the federal funds market.


What is approximate value of funds held in the open market reserve account of the Federal Reserve Bank of New York?

The approximate value of funds held in the open market reserve account of the Federal Reserve Bank of New York is $496 billion.


What is amalgamation reserve?

Amalgamation reserve means the expenses bear by Transferee company for amalgamation with Transferor company is treated as reserve, this reserve is called as amalgamation reserve


Define redemption of debentures out of capital?

When debentures are redeemed out of capital, no transfer is made to general reserve or debenture redemption reserve account. In this method it is assumed that the company has sufficient funds to redeem the debentures. So the profits are not utilised to replace the debentures.It affects adversely to the Working Capital of the company.


What is Debenture Redemption Reserve?

Debenture is a debt instrument to raise funds. It has a maturity period associated with it. At the end of the maturity, the company(borrower) should return the interest and principal amount. Debenture Redemption Reserve is an amount kept as reserve for paying the debenture holder at the end of the maturity period.


What is a reserve rate?

The amount of funds that banks must hold in reserves


What are the funds that banks use to satisfy the reserve requirement?

excess reserves


Are funds that the bank uses to satisfy the reserve requirement?

excess reserves


What does the phrase tax your reserves mean?

The phrase "tax your reserves" means to use reserve funds to conduct the business instead of saving them for possible business expansion. When a company uses up its reserves there is a good chance the company will then become insolvent.


2 Liberty Reserve SA company is entirely located in?

Liberty Reserve S.A. company is entirely located in