Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Tag along rights definition

What does Tag along rights mean? Tag along rights (also called piggyback or co‑sale rights) are contractual provisions allowing minority shareholders to join a proposed sale by a majority shareholder, so they can sell at the same time, price per share and on the same terms. The seller must procure that the buyer makes an equivalent offer for the tagging shareholders’ shares, often pro rata where less than 100% is sold. Typically set out in a shareholders’ agreement and/or the articles of association, these rights are not defined in statute (UK Companies Act 2006 or the Irish Companies Act 2014) and arise from contract; usage is broadly...

Drag-along and Tag-along in UK Company Law: Drafting, Enforcement, Procedures and Case Law for PE/VC and Joint Ventures

Published by a LexisNexis Corporate expert

Practice notes

Drag along and Tag along rights

Drag along and tag along rights are staple clauses in Private equity (PE)/Venture capital (VC) and corporate joint venture (JV) agreements and transaction papers for such deals within corporate JVs. Where a PE/VC fund investor, or a shareholder in a corporate JV holding a specified majority of the shares, undertakes a sale of a controlling interest, a drag along right (also called a come along right) permits the selling majority to complete an exit by requiring the remaining minority shareholders to sell their shares as well to a bona fide third-party purchaser on broadly equivalent terms. Conversely, when a majority shareholder chooses to sell, a tag along right (sometimes termed a piggy back right) allows the minority to exit the PE/VC fund or the JV by compelling the selling majority to procure that the third-party buyer extends its offer so it includes the minority shareholders’ shares on substantially the same terms. Accordingly, drag along rights tend to benefit the majority, whereas tag along rights are comparatively more favourable to minority shareholders. Set out below is a series of questions and answers exploring various aspects of a typical drag along and tag along provision used...

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Web page updated on 21/05/2026

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