drag-along right


A right that allows majority shareholders to force minority shareholders to accept an agreement. In a typical drag-along agreement, if a majority of shareholders agree to sell or liquidate a company then the remaining shareholders must consent and not raise objections. "Dragging" refers to the majority shareholder forcing the minority shareholder into an agreement that the minority shareholder may not want to enter into. Such a right is designed to block smaller investors from "holding out" on a deal in the hopes of raising share prices.
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