Abstract
The liquidation priority clause mainly comes from the exit link of the invested enterprise when the liquidation event occurs, and it is an important legal basis to guarantee the rights to obtain limited economic returns according to the contract content. However, due to the imperfect legal content in China, there are still some doubts about the legal effect of the liquidation priority clause, which affects the perfection and rationality of the withdrawal mechanism of private equity funds. Based on this, this paper expounds in detail the legal effect of the liquidation priority clause in the event of special events in private equity investment activities, hoping to draw lessons from it.
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