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Shotgun Clause
(redirected from Shotgun Clauses)

   Also found in: Wikipedia 0.01 sec.
Shotgun Clause
A provision in some shareholder or partnership agreement stating that if one shareholder offers to buy out the company at a certain price, the other shareholder(s) either must accept the offer or buy out the first shareholder at the same price. This is most common when two shareholders each own 50% of a business.


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Shotgun clauses most often are encountered in situations involving two equal (50/50) shareholders, and stipulate that one shareholder can offer to sell his or her shares to the other shareholder at a price and on terms specified in the offer.
Shotgun clauses permit a shareholder to require the other shareholders to either accept an offer to sell their shares or buy the shares of the offering shareholder.
 
 
 
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