Remove word in the Tag-Along Agreement

Aug 6th, 2022
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How to remove word in the Tag-Along Agreement

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a tag along right is a contractual agreement youd make with all of your partners Founders investors that permits uh if if one party is for example going to sell their Equity to an unrelated third party uh the tag along right would permit certain parties to tag along in the sale and ALS o realize some cash out value to their to their Equity so it prevents say one of your Founders from cashing out of your company without bringing you guys along um for the for the uh liquidity event so the tag along allows a party to tag along in a sale so that they can also realize some liquidity or cash to their uh equity

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Drag-along rights and tag-along rights are important forms of investment realisation in a shareholders agreement. Drag-along rights favour the majority shareholder while tag-along rights are more beneficial to the minority shareholder. Navigating a Shareholders Agreement: Drag Along and Tag Along Rights hfw.com Navigating-a-Shareholders-Agre hfw.com Navigating-a-Shareholders-Agre
The drag along clause requires the minor shareholder to sell their shares. The tag along clause requires the minor shareholder to be allowed to join in on a sale. Both clauses are designed to give the minor shareholder the rights to receive the same price, terms and conditions as any other seller. Drag and tag rights. What are the customary provisions? - Crest Legal crestlegal.com what-are-customary-drag-and-tag crestlegal.com what-are-customary-drag-and-tag
For example, if you own 10% of the companys shares and you have a tag along right, you would be given the opportunity to sell 10% of the total parcel of shares that are being sold. This type of clause would typically result in shareholders selling some of their shares, but none of them being able to sell all of them. Tag along rights in shareholders agreements - Turtons Lawyers turtons.com blog tag-along-rights-in-sha turtons.com blog tag-along-rights-in-sha
Types of tag-along rights The second (pro-rata tag-along right) forces the majority holder to reduce the amount of equity it wants to sell and provide the minority an opportunity to also sell their shares on a proportional (pro-rata basis). Tag-along right - Wikipedia wikipedia.org wiki Tag-alongright wikipedia.org wiki Tag-alongright
For example, a majority shareholder who holds 75% of the shares in the company who agrees to sell their shares in a share sale to a potential buyer, must offer the same price for the shares to the minority shareholders if they want to drag them along.
Tag-Along Rights: These protect minority shareholders (often investors) by allowing them to join the sale of their shares when a majority shareholder decides to sell their shares to a third party. The purpose is to ensure that minority shareholders can realise the same benefits and terms as the majority shareholder.
The phrase Tag Along means to follow along after someone; to go along with someone. Example of Use: The family dog tagged along after the children wherever they went.
The drag along clause requires the minor shareholder to sell their shares. The tag along clause requires the minor shareholder to be allowed to join in on a sale. Both clauses are designed to give the minor shareholder the rights to receive the same price, terms and conditions as any other seller.

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