Drag-Along Rights | Practical Law

Drag-Along Rights | Practical Law

Drag-Along Rights

Drag-Along Rights

Practical Law Glossary Item 7-382-3421 (Approx. 3 pages)

Glossary

Drag-Along Rights

The right for a majority of the equity holders (usually more than 75%) to accept an offer to buy their equity and to force the remaining holders to accept the offer on the same terms. Sometimes this right is only granted to one or more majority equity holders. Drag-along rights are typically found in a stockholders agreement in the case of a corporation or in the LLC agreement or partnership agreement in the case of an LLC or partnership.