Tag-Along Right

These rights enable the holder to participate in a sale of stock from another shareholder to a third party, typically in proportion to the number of shares the holder holds in the company. Co-sale rights are usually designed and intended to protect the holder if a founder or a majority shareholder decides to sell his, her or its interest in the company. The co-sale rights holder can participate in the sale, usually with the same terms and conditions as the founder or majority shareholder.