Article · 9 min read

Transfer of Share Rights: Tag-Along and Drag-Along Explained

Qapita Free Intermediate India

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.

• Tag-along lets a minority holder sell alongside the majority on identical terms, so nobody gets left behind with a new outside controlling shareholder
• Drag-along lets a qualifying majority compel minorities to sell into a bona fide exit, which most acquirers require since they want all of the company, not most of it
• Includes sample SHA wording and covers founder-side protections like a minimum drag price floor so you cannot be forced to sell too cheap