Capital Interest
A capital interest is an interest that would give the holder a share of the proceeds in either of the following situations:
- The owner withdraws from the partnership.
- The partnership liquidates.
The mere right to share in earnings and profits is not a capital interest in the partnership. This determination generally is made at the time of receipt of the partnership interest.
Read more about this topic: Partnership Accounting
Famous quotes containing the words capital and/or interest:
“The capital is become an overgrown monster; which like a dropsical head, will in time leave the body and extremities without nourishment and support.”
—Tobias Smollett (1721–1771)
“The most ingenious men continually pretend to condemn tricking—but this is often done that they may use it more conveniently themselves, when some great occasion or interest offers itself to them.”
—François, Duc De La Rochefoucauld (1613–1680)