tag-along rights

Definition

Provisions allowing minority shareholders to join a sale if majority shareholders exit—the friendlier sibling of drag-along rights. It's protection ensuring you can't get abandoned while insiders cash out.

Example Usage

When our lead investor sold their stake to a hedge fund, my tag-along rights meant I could also sell, though nobody told me about the sale until it closed.

Origin

Corporate securities law, companion provision to drag-along rights

Fun Fact

Tag-along rights are sometimes called 'co-sale rights,' making them sound cooperative rather than defensive against getting screwed.

Source: Securities law and shareholder agreements

Related Terms

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information rights

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