Startup Survival Guide

Video Lessons: Shareholders’ Agreement Clauses: What are Control Rights and What is a Drag Along/Tag Along?

In our new ‘Video Lessons’ blog series we share knowledge for both startups and investors in a short video format. The next couple of video lessons will be dedicated to the shareholders’ agreement. The shareholders’ agreement is a contract between all shareholders. It defines additional agreements which lie outside of the articles of your legal entity and sets the rules of the working relationship. Control rights basically mean that an investor can exercise some sort of control over the company. The drag along was created for the purpose of protecting majority shareholders, while the tag along tends to protect minority shareholders.

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