Drag along regeling

The drag-along provision appears in shareholders’ agreements of companies and entitles the majority, in the event of an acquisition, to compel the minority to sell its shares. This prevents a prospective buyer from being deterred by outstanding minority interests and facilitates a smooth exit.

The provision is relevant to investors and founders seeking a complete transfer of the company. Absent such a clause, minority shareholders could block the transaction or impose additional conditions. In practice, the provision is frequently combined with a tag-along provision to balance the interests of all parties.

When applied, the provision must be reasonable and must satisfy the standards of reasonableness and fairness under Dutch corporate law.