Tag-Along Rights

Glossary

Tag-Along Rights

Tag-along rights are a provision in a shareholders’ agreement designed to protect minority shareholders. When a majority shareholder decides to sell their stake, tag-along rights allow minority shareholders to “tag along” and sell their minority stake under the same terms and conditions. This provides an opportunity for minority shareholders to exit the company when a significant ownership shift happens, ensuring they are not left with new, possibly unfavorable, ownership.

Related terms