Undercapitalisation

Business, Legal & Accounting Glossary

Definition: Undercapitalisation


Undercapitalisation

Quick Summary of Undercapitalisation


Under-capitalisation refers to any situation where a business cannot acquire the funds they need.




What is the dictionary definition of Undercapitalisation?

Dictionary Definition


The state of a company that doesn’t have sufficient capital or reserves appropriate for the size of it’s operations.

For example: this may be due to the company growing too quickly.

Although such a company may be generating profits it may also be unable to convert these profits, both sufficiently and swiftly into cash in order to pay it’s debts.


Examples of Undercapitalisation in a sentence


Undercapitalisation remains the primary reason for business failure within the U.S. today; this is closely followed by insufficient business knowledge and market awareness.


Synonyms For Undercapitalisation


thin capitalisation, undercapitalization, thin capitalization, capitalisation, thin capitalisation rules


Cite Term


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Undercapitalisation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
March 28, 2024 https://payrollheaven.com/define/undercapitalisation/.
Chicago Manual of Style (CMS):
Undercapitalisation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd.
https://payrollheaven.com/define/undercapitalisation/ (accessed: March 28, 2024).
American Psychological Association (APA):
Undercapitalisation. PayrollHeaven.com. Retrieved March 28, 2024
, from PayrollHeaven.com website: https://payrollheaven.com/define/undercapitalisation/

Definition Sources


Definitions for Undercapitalisation are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 6th January, 2020 | 0 Views.