Drag-along right
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Drag-along right (DAR) is a legal concept in corporate law. The right assures that if the majority shareholder sells their stake, minority holders are forced to join the deal. This right protects majority shareholders.[1] A drag-along right gives the investing shareholder the right to force the other investor(s) to exit, should the investing shareholder exit, again, usually on the same price and terms. Drag-along rights are fairly standard terms in a stock purchase agreement. Drag-along rights typically terminate upon an initial public offering.[2]
See also[edit]
- Tag-Along right, the converse concept
- Pre-emption right
- Right of first refusal
References[edit]
- ^ Drag-Along Rights
- ^ www.altassets.com Archived April 18, 2008, at the Wayback Machine.
External links[edit]
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