Capacity to Incur Debt
/ˌkæpəˈsɪdəti tuː ɪnˈkɜr dɛt/
Definitions
- (n.) The legal ability or authority of an individual or entity to enter into binding financial obligations or borrow money.
Before taking out a loan, the company verified its capacity to incur debt under its corporate charter.
Forms
- capacity to incur debt
Related terms
See also
Commentary
Capacity to incur debt often hinges on statutory or contractual limits; drafting should clarify the scope of authority to prevent unauthorized obligations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.