Glossary
Glossaries
| Term | Definition |
|---|---|
| Legal person/entity | A person or entity created by law and recognized as having a distinct identity (legal personality), rights and obligations. FR: Personne morale / NL: Rechtspersoon |
| Letter of intent | Before entering into negotiations for a (financing or other, e.g. acquisition) transaction, a party will often send a letter to its counterparty setting out the main characteristics of the negotiation process. This is known as a letter of intent (LoI). The letter can be binding or non-binding. Typically, it contains a precise description of the transaction to be concluded, the process (such as due diligence), exclusivity rules, a description of the costs (i.e. who will bear the advisor's fees if the transaction closes/does not close), and confidentiality provisions. The LoI is often counter signed by the other party. FR: Lettre d'intention / NL: Intentieverklaring |
| Liability/responsibility | A party to an agreement or a third party can, under certain circumstances, claim compensation for harm suffered due to acts or omissions of the company or its representatives. Under Belgian law, liability may be based on contract or tort (i.e. civil negligence outside the scope of a contract). FR: Responsabilité / NL: Aansprakelijkheid |
| Liquidated damages clause | Under Belgian law, such a clause allows the parties to assess their damage on a lump-sum basis, upon conclusion of the contract, should a certain event occur or not occur. Such clauses are often raised in the event of violation of a noncompete or confidentiality undertaking or upon termination due to breach of contract. FR: Clause d'indemnisation (dommages et intérêts) / NL: Schadebeding |
| Liquidation preference | A term used to specify which investors get paid first should a liquidation event occur. For instance, if the company is wound up, the holders of preferred shares are typically entitled to receive liquidation proceeds before the holders of common shares. FR: Droit de priorité en cas de liquidation / NL: Preferentie bij liquidatie |
| Lock-up (stand-still) clause | Such a clause fosters stability amongst shareholders and is commonly used by founders and early-stage investors. Thus, the parties often agree to maintain their investment in the company for a minimum period of time (a so-called lock-up period). Further to this provision, they are not allowed to sell their shares or other financial instruments during a specified period of time after the company's creation or initial public offering. The purpose of this type of clause is to achieve price stability and prevent the dumping of shares on the market. Option agreements often contain a lock-up clause (in order to bind the person exercising the options to the company, the shares cannot be sold for a certain period of time). FR: Lock-up (stand-still) clause / NL: Niet-vervreemdingsclausule |