Stockholders Agreement: Drag-Along Rights | Practical Law

Stockholders Agreement: Drag-Along Rights | Practical Law

A drag-along provision for a stockholders agreement that grants a majority stockholder selling all of its shares to a third-party buyer the right to force the other stockholders to also sell all of their shares to that third party. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.

Stockholders Agreement: Drag-Along Rights

Practical Law Standard Clauses 6-383-5245 (Approx. 17 pages)

Stockholders Agreement: Drag-Along Rights

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A drag-along provision for a stockholders agreement that grants a majority stockholder selling all of its shares to a third-party buyer the right to force the other stockholders to also sell all of their shares to that third party. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.
On August 23, 2023, the SEC adopted new rules under the Investment Advisers Act of 1940 for private fund advisers (see Legal Update, SEC Adopts New Rules for Private Fund Advisers) (the "New Rules"). The New Rules are generally effective 12 to 18 months after publication in the Federal Register and will have a material impact on limited partnership agreements for private equity funds and may require revisions to this resource. Updates are planned in the near future. For more information on the final rule, see Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews, Fed. Reg. 88 FR 63206 (Sept. 14, 2023).