The notice period for the exercise of Tag Along`s provisions is also important. Too short a notice period will make it more difficult for other shareholders to make an informed decision about whether or not to participate in the sale, while too long will discourage potential buyers who do not want to comply with such a tedious process.  Failure to comply with the notice period could also render the clause unenforceable in court, as was decided in Halpin v. Riverstone National, Inc., C.A. no. 9796-VCG (in this case, the Court considered drag-along rights, another similar provision, but the general principle remains valid mutatis mutandis). Since participating shareholders cannot sell their shares to another potential purchaser if an existing sales contract has not yet been entered into, it is necessary to set a maximum time limit for the conclusion of a sale.  The majority shareholder may benefit from a take-along clause because it gives minority investors (again, who will likely be more involved in the management of the business) a sense of fairness in the treatment they are likely to bring more or less resistance to the possibility of an execrable sale. Some argue that a buy-back commission could discourage potential buyers, but in most cases, a new purchaser buys to change the direction of the acquisition (for example.
B merging departments with an existing company to create synergies), and management is much more difficult to change when minority shareholders are involved. However, if the shareholders have entered into a shareholders` pact with a tag along rights provision, the minority shareholder has the right to participate in the sale of the shares if he is interested. The investor is technology oriented and has important relationships with some of the large state-owned technology companies. The co-founders of startups know this and therefore negotiate the Tag Along rights in their investment contract. Business continues to grow over the next three years, and the angel investor, satisfied with their return on paper, is looking for a buyer for their equity among the major technology companies.