Drag-Along Rights
A right that enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other seller. Investopedia Says:
This is designed to protect the majority shareholder. Because some buyers are only looking to have complete control of a company, drag-along rights help to eliminate minority owners and sell 100% of a company's securities to the buyer. Related Terms:
Tag-Along Rights |