Tag Along Clause

A 'Tag Along' Clause is used in situations where there are minority and majority shareholders and its purpose is to protect the interests of a minority shareholder. The right assures that if the majority shareholder sells his stake, minority holders have the right to join the deal and sell their stake at the same terms and conditions as would apply to the majority shareholder.

In addition to making special provision within the Articles it is also recommended that the clause is included in a (long form) Shareholder Agreement with appropriately worded minority shareholder bias.