Common use of Applicable restriction defined Clause in Contracts

Applicable restriction defined. An applicable restriction is a limitation on the ability to liquidate the entity (in whole or in part) that is more re- strictive than the limitations that would apply under the State law gen- erally applicable to the entity in the absence of the restriction. A restric- tion is an applicable restriction only to the extent that either the restriction by its terms will lapse at any time after the transfer, or the transferor (or the transferor’s estate) and any mem- bers of the transferor’s family can re- move the restriction immediately after the transfer. Ability to remove the re- striction is determined by reference to the State law that would apply but for a more restrictive rule in the gov- erning instruments of the entity. See

Applicable restriction defined. An applicable restriction is a limitation on the ability to liquidate the entity (in whole or in part) that is more re- strictive than the limitations that would apply under the State law gen- erally applicable to the entity in the absence of the restriction. A restric- tion is an applicable restriction only to the extent that either the restriction by its terms will lapse at any time after the transfer, or the transferor (or the transferor’s estate) and any mem- bers of the transferor’s family can re- move the restriction immediately after the transfer. Ability to remove the re- striction is determined by reference to the State law that would apply but for a more restrictive rule in the gov- erning instruments of the entity. Seefor