Drag-along and Tag-along Rights: Navigating Stakeholder Protections in Business Transactions

October 2023
Region: Europe

Hannah Crosland and Josh Lodge discuss Drag-along and Tag-along rights in business transactions, highlighting their purpose of protecting the majority and minority stakeholders, respectively. Drag-along rights allow the majority to compel the minority to participate in a 100% company sale, while Tag-along rights enable the minority to ensure their shares are included in a majority stake sale, preventing isolation with a new majority shareholder. The negotiation points involve competing interests between investors and founders, focusing on exit timing and thresholds to balance perspectives and protections.

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