Which of the following is a restrictive covenant?

Question

Quizplus · Accepted Answer

A restrictive covenant is a clause in a contract that limits or prohibits certain actions by one or both parties. The specific example of "imposing fixed asset restrictions" suggests a limitation on the way the business can use its assets, which is a clear example of a restrictive covenant. The other options (maintaining accounting records, paying taxes, supplying audited financial statements) are all standard business practices and expectations, but they do not necessarily represent restrictions or limitations.

Which of the Following Is a Restrictive Covenant