picture of Rajah

Rajah Lehal

Drag-along Provisions Allow for Future Flexibility

February 13, 2016

Links from this article: Read the article here. here!

If there is a bona fide takeover bid from a third party, a majority of the shareholders can agree to the take-over on behalf of all shareholders due to the drag-along provisions. These provisions require the remaining shareholders to sell all of their shares to the third-party acquiror. Any remaining shareholder who fails to comply with the drag-along will be subject to the exercise of a power of attorney designed to allow the majority shareholders to complete the takeover bid.

Read the article here.Take away:

  • A company needs to be prepared for all future scenarios including takeover scenarios, and drag-along provisions are part of that preparation.

Are you a Startup Company looking for discounted legal services? Check out our partnership with Black Letter Law lawyers here!

ESOP
Drag Along Right
Human Resources

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.