LEGITIMACY THEORY Definition

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LEGITIMACY THEORY posits that businesses are bound by the social contract in which the firms agree to perform various socially desired actions in return for approval of its objectives and other rewards, and this ultimately guarantees its continued existence.

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In the company's financial reporting documents this category may contain several line items, e.g. R&D, Sales & Marketing, and General & Administrative. You must ensure that all Overhead Expense line items are contained and accounted for within this category. Where there in no matching category, enter those amounts on a cumulative basis into the General & Administrative category. Enter all amounts in 1,000's.

OBLIGATION BOND is a bond signed by a mortgagor (borrower) for an amount greater than the loan amount. Such a bond creates a personal obligation on the part of the borrower and assures the lender of recourse in case of nonpayment of property taxes and insurance or past due interest on the mortgage.

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