Myrtle Beach Non-Profit Attorneys & Lawyers

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What Is a Condition Subsequent?

A condition subsequent (CS) is an exit clause from an existing contract. The agreement between parties includes language that frees one of them from the deal. This happens when a conditional outcome occurs. A CS relieves a party of all obligations.

What's the Purpose of a Condition Subsequent?

Think of a condition subsequent as an escape clause. It ends a party's contractual obligation. In contracts, all involved parties have certain responsibilities. The CS gives one party the ability to walk away from the promise to perform a duty.

A CS is a kind of insurance for one or more parties. It makes sure that one of the groups in the contract can leave when certain conditions are met.

Think of a contract as a series of promises. Ev

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What Are Tag Along Rights?

Tag along rights or "co-sale rights" are legal agreements that guarantee minority stakeholders the right to sell their shares in the company at the same time and under the same conditions as the majority stakeholder. These rights are often used when companies are founded and capitalized because it protects investors and encourages them to buy the company's stock at an early stage. This is especially true for most angel investors, who won't even think of joining unless there are tag along rights.

Why Are Tag Along Rights Important?

Tag along rights protect minority stakeholders by giving them a certain amount of control over their own investments. If a principal stakeholder of the company liquidates its share, smaller investors won't get a bad deal. In simple words: If Investor A is selling their interest in the company, Investor B gets to sell their interest

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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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What Is the Key Man Clause?

A key man clause (or key person clause) says that when certain executives of an investment firm are absent, the firm cannot make any new investments until they replace them. Investments need constant watching. Therefore, it's important for investment firms to always have someone in charge.

Key man clauses trigger anytime the executives named by the clause aren't spending enough time managing the firm's investments. This can happen if the executive:

• Dies
• Suffers a permanent or long-term disability
• Spends too much time at another job
• Quits or is fired
• Is convicted of a serious crime

Whatever the cause happens to be, if the executive can't do his or her job, the key man clause puts investing on hold at the very least. Sometimes it means the investment firm has to end, depending on how big the firm is and how important the key person was.

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