| Commentary

114.5 Winding up of the company

| Commentary

114.5 Winding up of the company

As a way of concentrating the parties’ minds and trying to encourage a settlement, deadlock provisions sometimes state that, if agreement has not been reached by a certain deadline, the company must be wound up and its business sold. As this is likely to be the last thing that anyone wants, this may have the desired effect of prompting a negotiated agreement.

In the situation where one shareholder is out of line commercially and is likely to be parting company with the majority, this type of clause needs careful thought as it may in practice

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