Although the Ability to Raise Capital Is Better with a Partnership

question 135

True/False

Although the ability to raise capital is better with a partnership than with a proprietorship, a partnership still cannot usually gather as many resources as a corporation.

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Definitions:

Covenants Restricting

Clauses in loan agreements that impose limits on the actions of the borrower to protect the interests of the lender.

Dividend Payments

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Principal and Interest

The two components of a loan payment; principal is the original amount borrowed, and interest is the charge for borrowing the principal.

Renegotiate Covenants

The act of revising the terms of a loan or bond agreement, often to relax or tighten restrictions on the borrower.