Drag Along v. Tag Along Rights

Both drag along rights and tag along rights can be very beneficial in an LLC Operating Agreement or a corporation’s Shareholder Agreement.  They both relate generally to when an owner (or a group of owners) holding a certain percentage of the equity of a company (usually a majority) wish to sell their interests in the company to a third party.  Tag along rights are beneficial to minority owners, while drag along rights are beneficial to majority owners.

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