What is Drag-Along Rights?

A definition of Drag-Along Rights

“Drag-along rights are legal provisions that allow majority shareholders to force minority shareholders to sell their stakes if a third party wants to buy the company.”

Drag-Along Rights in Business Glossary - What is  Drag-Along Rights?

Business Glossary > What is Drag-Along Rights?


Examples of Drag-Along Rights in a Sentence:

Drag-along rights ensure all shareholders sell during an acquisition.

The agreement included drag-along rights to protect majority interests.

Without drag-along rights, the sale could have faced unexpected hurdles.

Why is Drag-Along Rights Important in Business?

Drag-along rights are important as they facilitate smooth company acquisitions by allowing majority shareholders to compel minority shareholders to sell their shares, ensuring the transaction proceeds without obstruction.

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Associated Terms

Here are some associated business terms and synonyms for “Drag-Along Rights”:

  • Tag-Along Rights
  • Co-Sale Rights
  • Pull-Along Rights

XYZ Corp Drag-Along Rights

When XYZ Corp was approached for acquisition, the company’s drag-along rights allowed the major shareholders to proceed smoothly with the sale, as they could obligate minority stakeholders to sell their shares as well, avoiding potential transaction delays.

Final Notes on Drag-Along Rights

When negotiating shareholder agreements, it’s important to understand the implications of drag-along rights, including the balance of power between majority and minority shareholders.


This has been a definition of Drag-Along Rights meaning.

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