9 Dec 2013
The Priority of Payment
In the event of the insolvency of a company, there is a priority of claims on the assets of the company. The degree to which this actually happens depends on the legal environment of the country. A typical priority structure would be:
In today’s financial world, the role of the investors is a crucial one. Banks have moved away from taking the majority of risk on their balance sheet from clients who wish to raise capital. As a result, banks need to find providers of capital who wish to take risk and invest in those companies who are raising money.
There are a wide variety of investor types and we shall examine the principal ones.