Safe Harbor

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What is a Safe Harbor?

If a startup wants to decrease the likelihood that their company might be affected by a hostile takeover, a strategy called a safe harbor might be placed into motion. A safe harbor involves a company intentionally acquiring a company that is heavily regulated. This helps make them appear less attractive to anyone looking to assert a hostile takeover since too many regulations can negatively impact the income of an acquiring entity.

Safe Harbor Examples

Examples of a safe harbor:

  • Example 1. Often an amendment or bylaw in company contracts
  • Example 2. Can only be set into motion in the event of a hostile takeover
  • Example 3. Shields management from liability
  • Example 4. Can also be helpful in reducing tax liability

Here’s another web page about a safe harbor.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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