Legal Reserve
/ˈliːɡəl rɪˈzɜːrv/
Definitions
- (n.) A mandatory minimum reserve fund that a corporation or financial institution must retain to ensure financial stability and protect creditors.
The company was required by law to maintain a legal reserve to safeguard against potential insolvency.
- (n.) An obligatory amount of capital set aside by banks to meet regulatory requirements.
The bank's legal reserve exceeded the minimum requirement set by the central bank.
Forms
- legal reserve
Related terms
See also
Commentary
Legal reserves are often stipulated by statute or regulation to enhance creditor protection; precise requirements vary by jurisdiction.
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.