What is a drag-along right under Dutch law?

Dutch term: Drag-along regeling | Legal basis: Contractual (shareholders agreement)

A drag-along right is a contractual provision in a shareholders agreement that allows a majority shareholder (or a group of shareholders above a defined threshold) to compel the minority shareholders to sell their shares to a third-party buyer on the same terms. The purpose is to enable a clean exit sale of 100% of the company.

Dutch law does not provide a statutory drag-along right; it must be agreed in the shareholders agreement. The clause typically specifies the triggering threshold (e.g. 75% or more of shares), the conditions for exercise (bona fide offer, minimum price, arm's length terms), and the procedure (notice, valuation, closing mechanics). Enforceability depends on the clause being proportionate and sufficiently detailed.

Why it matters for international businesses

For private equity investors and joint venture partners in Dutch B.V.'s, a well-drafted drag-along clause is essential for exit planning.