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Definition
Company reserves are the accumulated profits and other amounts a company holds in its equity — chiefly retained earnings — that build its net worth and, where distributable, support dividend payments.
In plain terms
Reserves are the store of value a company has kept back over time. The distributable part is what you can lawfully pay out as dividends; the rest strengthens the balance sheet.
Why it matters for your company
Healthy reserves signal a resilient, self-funding business and underpin dividend capacity. Draining them to pay out weakens the company and its standing with lenders. Reserves are a core measure of financial strength.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.