Drag-Along Rights

An arrangement whereby a (majority) shareholder has the right to force other (minority) shareholders to cooperate in selling the company. Purpose of this arrangement is to provide the buyer with all the share The portion of registered capital of a private or public limited company
» Meer over share shares. This arrangement is normally included in the shareholders’ agreement.

A variation on this arrangement is the tag-along arrangement. Hereby the minority shareholder has the right to sell his shares together with the shares of majority shareholder. He can “tag along” with the deal of the majority shareholder. It is required however that the minority shareholder sells his shares under the same conditions as the majority shareholder.