Drag Along

Definitions

1. A contractual right allowing majority or specified shareholders to require minority holders to participate in a sale or transaction on the same terms. Drag-along provisions reduce the risk of a deal being blocked by holdouts.

   In plain English: A rule that can force minority shareholders to join a company sale.

   Example: "The acquirer wanted the drag along mechanics confirmed before signing."

Related Terms

• Term Sheet
• Exit
• Due Diligence
• SAFE
• Double Trigger
• Enterprise Value
• Information Rights
• IOI
• Management Buyout
• Public Benefit Corporation
• Right of First Refusal
• ROFR