A Tag-Along Clause protects the interests of Minority Shareholders. In the case of the majority shareholder selling out, the Tag-Along Rights allow the minority shareholders to jump on the back of the buy-out.

The Tag-Along Clause is generally included in Shareholders’ Agreements to protect the position of the minority shareholders. Where the majority shareholder decides to sell his shares, this clause gives the minority shareholders the right to sell their shares to the same buyer for the same price and on the same terms and conditions. In basic terms, the Tag-Along Clause prevents a majority shareholder selling his stake in a company and leaving the other shareholders without an exit and with a change of company control.

This Tag-Along Clause template can be purchased in order to be included within a Shareholders’ Agreement.

Please note that this clause is already included in the Shareholders Agreement - Protection Minority Shareholders.