Tag-Along Rights

Also called Tag-Along and Co-Sale Rights

A right that lets minority shareholders join a sale on the same terms when a major shareholder sells their stake, so they are not left behind with a new majority owner.

Why it matters

Tag-along protects small holders, often founders and early employees, from being stranded when a big investor exits. It is the natural counterpart to drag-along and belongs in a fair shareholders' agreement.

For example

When the lead investor sells its stake, a founder's tag-along right lets them sell a proportional amount to the same buyer on the same terms.

Go deeper

Transfer of Share Rights: Tag-Along and Drag-Along Explained Qapita · article ROFR alone does not finish the job: you still need tag-along so a minority founder is not stranded when the majority exits, and drag-along so one holdout cannot block a clean 100 percent sale. This piece explains both with sample clause language and the usual 50 percent-plus trigger, from the same India-context source as the ROFR guide. Open qapita.com →

Related terms

Drag-Along Rights Shareholders' Agreement Secondary Sale

Also in Starting Up

See how founders actually handle this on Raising your first round, part of the Starting Up hub.

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