Is the validity of a drag-along clause subject to specific requirements?

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Drag-along clauses are often found in shareholders’ agreements of joint stock companies. They provide an equity capital sale mechanism which ensures that if a third party offers to acquire the entire equity capital of the company, the majority shareholder has the option of benefiting from such offer and may use it to compel the minority shareholder to sell its entire participation to the would-be acquirer.
Article filed under: Private Equity
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