Protects the Shareholders holding a majority of the Issuer’s equity. This enables the Issuer to pursue certain strategic transactions, such as a sale of the Company, if approved by a majority (or possibly super-majority) of all shareholders. Minority shareholders are forced to join the transaction on the same price and terms as other selling shareholders. The percent necessary to “trigger” Drag-Along Rights often is as high as 75% approval for the transaction in question. These are standard terms in a stock purchase agreement, and they terminate upon an initial public offering or sale of the Issuer. Pertains to real estate and equity investments.
« Back to Glossary IndexDrag-Along Rights
by bsmith@carofin.com | Jun 21, 2022
