| Drag
Along Rights |
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In the sale of a company, a right that enables a majority shareholder
to force a minority shareholder to join in the sale. The majority
owner doing the dragging must give the minority share holder the same
price, terms, and conditions for the security being sold as any other
seller.
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This
is designed to protect the majority shareholder. Because some buyers
are only looking to have complete control of a company, drag along
rights help to eliminate minority owners and sell 100% of a company's
securities to the buyer. |
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