Preferential Liquidation Clause

It is a clause which grants certain shareholders a preferential right to the liquidation bonus or to the proceeds of the sale of the company’s shares.

These clauses will generally ensure that they are applicable to any form of shareholder uplift, regardless of its source (from the company or a third party) and whether it is in cash or in kind (e.g. shares received in a merger where the target company is not the surviving entity).

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