Some shareholders, such as Z.B. Venture capitalists or fishers may require that the provisions be conditional and limited with delay or have certain exceptions. Although rights are strongly favoured vis-à-vis majority shareholders because they are prevented from participating in the company, these clauses also ensure that minority shareholders are treated in the same way as majority shareholders. A deduction allows a majority shareholder of a company to compel the remaining minority shareholders to accept an offer to purchase the entire company. The majority shareholder who „drags” the other shareholders must offer minority shareholders the same price and conditions offered to the majority shareholder. For example, a majority shareholder who owns 75% of the company`s shares and agrees to sell his shares in a potential acquirer must offer minority shareholders the same price for the shares if they want to „follow” them. A drag along clause will allow the majority shareholder to take the remaining minority shareholders with him and ask them to sell their shares to the potential buyer at the same price, so that the buyer can buy the entire business. Day-long rights are also known as „co-sale sales rights” are the reversal of drag rights along. When a majority shareholder sells its shares, a right allows the minority shareholder to participate simultaneously in the sale at the same price for the shares. The minority shareholder „meets” with the sale of the majority shareholder. Rights throughout the day are generally formulated in such a way that if the day is not followed along the proceedings, any attempt to purchase shares in the company is invalid and is not registered. The objective of the rights is to provide a majority shareholder with liquidity, flexibility and a simple way out.
Given that many buyers of a target company want 100% control of the transaction and rarely agree to allow a minority shareholder to retain a minority stake, it would be difficult for a majority shareholder to accept an offer if minority shareholders do not cooperate and block the sale of a business. Only in this way can shareholders, bondholders and company executives be truly disciplined. The Tag Along clauses are intended to protect minority shareholders from abandonment when a majority shareholder decides to sell its shares. If a minority shareholder owns 10% of a company, it would be difficult to sell because most buyers want 100% of a business. This may force minority shareholders to sell their shares at a much lower price or to do nothing about the true value of the company. Without a day along the rights, minority shareholders may find that they hold unvalued or devalued shares. Drag along rights are triggered in all kinds of sales transactions, such as mergers and acquisitions or a change of control within the company.