drag (verb, drag, \ dræɡ \) along (adverb, a-long, \ əˈlɔːŋ \) right (noun, right, \ raɪt \)
Definition: is a privilege assigned to a majority stockholder of a corporation that forces all the minority shareholders to participate in the sale of the company. However, the terms and conditions of the sale, as well as the price offered to the minority stockholders have to be identical to those agreed upon in the shareholders’ agreement. The purpose of this right is to protect the interests of the majority shareholder. The drag along right is usually enabled when either a business merger or acquisition takes place so that the buyer can get rid of any minority owners and completely control the purchased company.
In a Sentence:
- I don’t think you should even bother with talking to other shareholders, just invoke the drag along right and sell the company.
- Mr. Aspin didn’t understand what the minority shareholders’ problem was with the drag along right, since they were given a great price for their shares.
- Gerald Thomas decided to trigger the drag along right and finalize the deal of selling Deo Motors to Ford.
Synonyms and related words: tag along right, majority shareholder, minority shareholder, co-sale rights
