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Solid post. Echoes many of the things I've been told by very seasoned lawyers in the field. Tag along clauses for corporate investors are advisable to prevent
by hkmurakami 10y ago
Solid post. Echoes many of the things I've been told by very seasoned lawyers in the field.
Tag along clauses for corporate investors are advisable to prevent them from blocking acquisitions etc.
- rahimnathwani 10y ago"Tag along clauses ... to prevent them from blocking acquisitions ..." I think you mean 'drag-along' rather than 'tag-along'. Tag-along clauses give minority shareholders the right (but not the obligation) to join a deal negotiated by majority shareholders. Their intention is to prevent minority shareholders from being screwed. Drag-along clauses give majority shareholders the right to force minority shareholders to participate in a deal. Their intention is to prevent minority shareholders from blocking a deal. In practice, many agreements include both tag-along and drag-along. The parties assume that the majority shareholder does the deal on behalf of all the others.
- hkmurakami 10y agoOh right, sorry I got the two mixed up and yes including both would be prudent.