The capital impairment restrictions are established to

Question

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The capital impairment restrictions are put in place to ensure that a company retains a sufficient base to protect creditors' claims, which ultimately safeguards the financial position of the company. This can be achieved by limiting the amount of dividends paid out to shareholders, or by restricting the amount of funds that the company can allocate towards other activities such as share buybacks or investments. By doing so, the company is better able to weather any financial difficulties that may arise, and is less likely to default on its obligations to creditors.

The Capital Impairment Restrictions Are Established to