本文发表在 rolia.net 枫下论坛Reading any agreement can be a headache to most of us. To have prior knowledge of common legal terms/condition will make the reading/understanding a lot easier. I attended a meeting this morning for an ongoing M&A deal. During the session, the CEO and lawyer started to discussed the resepctive share ownership and the "drag along rights" term came up. I heard it before but never tried to look into it. After the meeting, I googled it and found its definition:

A right that enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other seller.

Here is the definition for tag along rights:

A contractual obligation used to protect a minority shareholder (usually in a venture capital deal). If a majority shareholder sells his or her stake, then the minority shareholder has the right to join the transaction and sell his or her minority stake in the company.

See the difference? one is to protect the majority of the shareholders and the other is to protect the minority of the shareholders.

Why does it matter? It means you can get the deal done if you can win the vote of the majority. Because the rest will be "dragged along" with the same terms and conditions.

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