Tag-Along Rights
Definition
A provision that gives minority shareholders the right to join a transaction when a majority shareholder sells their stake, ensuring they can exit on the same terms and conditions. Tag-along rights protect minority investors from being left in a company after a controlling interest changes hands.
Related Terms
Related FAQ
What are drag-along rights and when are they exercised?
Drag-along rights allow majority shareholders (often preferred investors) to force minority shareholders (usually founders) to sell their shares in an acquisition, preventing holdouts from blocking deals.
Read full answer →What is a co-sale right (tag-along right for shareholders)?
Co-sale rights allow shareholders to participate in a sale of the company on the same terms negotiated by majority shareholders, preventing discrimination against minorities.
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