Inadequate capitalization definition
Inadequate capitalization means capitalization very small in relation to the nature of the business of the corporation and the risks attendant to such businesses. Cmty. Care Centers, Inc. v. Hamilton, 774 N.E.2d 559, 565 (Ind. Ct. App. 2002) (quoting
Inadequate capitalization. . . . means capitalization very small in relation to the nature of the business of the corporation and the risks the business necessarily entails. Inadequate capitalization is measured at the time of formation of the corporation. A corporation that was adequately capitalized when formed but has suffered losses is not undercapitalized. Whether a corporation is undercapitalized . . . presents a question of fact that turns on the nature of the business of the particular corporation.
Examples of Inadequate capitalization in a sentence
Inadequate capitalization generally means capitalization very small in relation to the nature of the business of the corporation and the risks attendant to such businesses.