Which of the following statements is correct in relation to the "maintenance of capital" principle?

Which of the following statements is correct in relation to the "maintenance of capital" principle?
A . A company cannot use its share capital which must be set aside as a fund for creditors.
B . In general, a company can use its share capital for any reason whatsoever, as long as it ensures that there is sufficient remaining to meet the company’s debts.
C . In general, a company is not able to freely return its share capital to its members.
D . A company cannot use its share capital, and may only return it to its members with the permission of the court.

View Answer

Answer: C