Myrtle Beach Non-Profit Attorneys & Lawyers

Key Takeaways

• Tag along rights, also known as co-sale rights, protect minority shareholders by allowing them to sell their shares on the same terms as majority shareholders.
• They are commonly included in shareholder or stockholder agreements to ensure fairness during company sales or ownership changes.
• These rights encourage investment by offering minority investors exit opportunities if majority holders sell their stakes.
• Properly drafted clauses should define triggering events, notice requirements, and proportional sale rights to avoid disputes.
• Balancing tag along and drag along rights is essential to prevent conflicts between majority control and minority protectio

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A preferred return, often shortened to pref, determines who receives investment distributions first and how much must be allocated before the next waterfall tier begins. A stated rate such as 7% or 8% establishes priority under the agreement, but it does not guarantee that the investment will produce enough cash to pay it.

Key Takeaways

• A preferred return gives designated investors priority over specified distributions, usually before a sponsor earns a promote or carried interest.
• The stated percentage is not a guaranteed yield, minimum cash payment, or measure of the investment's total performance.
• The agreement should identify t

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Key Takeaways

• Legal due diligence ensures informed decisions in mergers, acquisitions, and major business transactions.
• It includes reviewing corporate documents, contracts, intellectual property, and potential legal risks.
• A clear process, including planning, document analysis, and legal review, enhances accuracy and reduces liability.
• Specialized tools and professional legal support can streamline the investigation and reporting process.
• Thorough due diligence can expose hidden liabilities and strengthen negotiating positions.

What is Legal Due Diligence

Legal due diligence is an investigation into a business by re viewing documents and interviewing employees. A legal due diligence investigation is completed when a business or investor is interested in buying a business or investing in that business.

A legal due diligence investigation is seeking information about the business to make sure that the invest

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Key Takeaways

• A key man clause suspends new investments if named executives or managers are unavailable due to death, disability, departure, or other disqualifying events.
• It protects investors by ensuring qualified leaders are actively managing funds, and reassures limited partners of operational stability.
• The clause is common in private equity, venture capital, hedge funds, and even creative industries like music, where leadership roles are essential.
• Key man clauses are often paired with key person insurance and a written contingency plan to reduce financial and operational risk.
• Negotiations typically focus on which individuals trigger the clause, the number of de

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Condition precedent vs condition subsequent is mainly a question of timing and effect. A condition precedent must occur before a duty arises, while a condition subsequent can end or alter a duty that has already taken effect.

Key Takeaways

• A condition subsequent is a specified event that affects an existing contractual duty.
• A condition precedent must occur before a contractual duty becomes enforceable.
• The contract should separate the triggering event from its legal consequence.
• The same transaction can use either type of condition, depending on when the parties want duties to arise or end.

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