A Drag-Along Right is a provision in an agreement that enables a majority shareholder to force a minority shareholder to join in the sale of a company. This provision is typically used in the sale of a business, where the majority shareholder wants to sell their stake and the minority shareholder may not want to or may not be able to sell their stake.The drag-along right allows the majority shareholder to "drag along" the minority shareholder in the sale, so that the minority shareholder has to sell their stake as well. This can be beneficial for the majority shareholder, as it enables them to sell their stake in the company.However, it can be disadvantageous for the minority shareholder, as they may not want to sell their stake or may not be able to get the same price for their stake as the majority shareholder.
If you are a minority shareholder in a company, it is important to be aware of drag-along rights and how they may affect you.
