Investor rights
What is Drag-along Right?
A clause that forces minority shareholders to sell their stock if a majority votes to sell the company.
Drag-along rights ensure that a majority of shareholders can force a sale of the company by bringing along (or 'dragging') all other shareholders. Without drag-along, a single small shareholder could block an acquisition by refusing to sell. The right is typically triggered by a vote of a defined supermajority (e.g., majority of preferred + majority of common). Limits often include minimum sale price thresholds and basic protections (like requiring the same per-share terms across all shareholders).