A “tag along” clause (also known as “piggyback rights”) protects minority shareholders in the event of a third-party purchase. When a majority shareholder sells its shares to a third party, the minority shareholder has the right to be part of the transaction and to sell its shares at the same price and on similar terms to the same third-party purchaser. The third party must therefore be prepared to acquire ALL the shares in progress if they wish to acquire the shares. The advantage for the minority shareholder is that he can avoid being a co-owner with an unwanted new co-owner. It also ensures that all shareholders receive similar takeover offers and protects small shareholders from having to accept much less attractive offers. A day gap along the rights is that it can lead to long delays in the sale of shares. A non-compete clause prohibits shareholders from competing with the group while they own the group and for a short period after leaving the group. In a small business, customers work closely with shareholders. A non-compete clause prevents an influential or former shareholder from attracting customers out of the group. A shareholder who leaves the group may also have confidential information that can be used to the benefit of the group. The general meeting is a meeting of the owners (shareholders) of a publicly traded company, in which they have the right to exercise certain shareholder rights. Shares that are not traded on the stock exchange are difficult to assess because they cannot easily be converted into cash. The valuation of the shares itself can lead to a strong overvaluation or undervaluation of the share price.
Both of these errors can harm the company and all affected shareholders. A professional will give a more accurate, fair assessment to all shareholders. However, evaluation can be costly, so you need to carefully evaluate whether or not you want to use a professional evaluator. Mediation is a process in which a neutral third party, the Mediator, assists the parties to the conflict in negotiating an agreement on the issue of conflict. Arbitration is a procedure by which the parties to the dispute submit their dispute to an agreed neutral third party who, after hearing from both parties, will decide the resolution of the problem. A pre-payment right assumes that, when an existing shareholder wishes to sell its shares, all shares must first be offered pro-rata to existing shareholders, allowing existing shareholders to retain their percentage in the company before being sold to an external third party. It also protects existing shareholders from unpleasant new shareholders.