What is fixed capital?

The term fixed capital refers to assets a business must acquire in order to operate the company, but which are not purchased over and over to manufacture a product or provide a service, according to Investopedia. Examples of fixed capital include documents, such as legal contracts, and the premises on which a business is run, such as an office building or storefront.

Fixed capital is also called a "fixed investment" and encompasses assets that are used continuously during the business's operation, according to the Business Dictionary. For example, the equipment used to produce merchandise would constitute fixed capital because it is not depleted with each use.