The Come-Along Clause: What It Means and How to Negotiate It (2026)

What is a come-along clause? A come-along clause lets a majority shareholder, or a defined group of selling shareholders, require the minority to join in a sale of the company on the same terms. If the majority finds a buyer for the business, it can make the minority sell their shares too, so the buyer can walk away with 100 percent of the company. "Come-along" is another name for a drag-along right. The minority is "dragged", or made to come along, into the sale the majority has agreed. You will see both names used for the same mechanism, so if a shareholders' agreement uses "come-along", read it as a drag-along right. It is the mirror image of a tag-along (or co-sale) right, which protects the minority by letting them join a sale if they want to. A come-along forces the minority in; a tag-along lets the minority opt in. The two are usually drafted together. This article is general guidance, not legal advice. These clauses interact with company law and can force a sale, so have a qualified lawyer review one for a real deal. ## Why it exists Most buyers of a private company want all of it, not most of it. A minority left behind can block decisions, demand a premium to sell at the last minute, or simply make the deal unattractive. A come-along clause removes that risk: it guarantees the buyer can get the whole company if the majority agrees to sell, which makes the company far easier to sell and often more valuable. For the majority and the investors, that certainty is the point. For the minority, the clause means they can be made to exit on someone else's timing, which is why the protections inside it matter so much. ## Sample come-along (drag-along) clause The block below is illustrative drafting, not a precedent for a specific deal. ```

COME-ALONG (DRAG-ALONG) 1. If holders of at least [75]% of the shares (the "Selling Shareholders") agree to sell their shares to a bona fide third-party buyer (the "Buyer") in an arm's length transaction, the Selling Shareholders may require all other shareholders (the "Dragged Shareholders") to sell all of their shares to the Buyer. 2. The Dragged Shareholders must sell on the same terms and at the same price per share as the Selling Shareholders, and must give the same representations and warranties, provided that: (a) any liability for warranties is several, not joint, and is capped at the proceeds each shareholder receives; and (b) no Dragged Shareholder is required to accept terms materially worse than those accepted by the Selling Shareholders. 3. The Selling Shareholders shall give written notice of the Buyer, the price and the key terms at least [15] business days before completion. 4. If a Dragged Shareholder fails to complete, [an authorised person] may execute the transfer on its behalf, and the company shall register the transfer against receipt of the price. 5. This clause does not apply to a sale to a competitor of the company unless holders of at least [90]% approve.

- **Same terms and price (clause 2).** The core protection for the minority is that they get the same price per share and the same terms as the majority. Several, capped liability stops a small holder being exposed to the whole deal's warranties.
- **Notice (clause 3).** A clear notice period lets the minority understand what is happening before completion.
- **Power to transfer (clause 4).** This makes the clause work in practice, so a refusenik cannot block a deal everyone else has agreed.
- **Carve-outs (clause 5).** The minority often negotiates extra protection against a sale to a competitor, or a minimum price, before they can be dragged. ## Negotiation points for the majority and investors - Set a trigger threshold you can realistically reach, so the right is actually usable.
- Keep the power-to-transfer mechanism, so one holdout cannot block the sale.
- Require the minority to give the same warranties, so the buyer gets a clean deal. ## Negotiation points for the minority - Push the trigger threshold up, so you cannot be dragged by a bare majority.
- Insist on the same price and terms as the majority, with no side deals or sweeteners for the sellers that you do not share.
- Cap your warranty exposure to your own sale proceeds, on a several, not joint, basis.
- Negotiate a minimum price or valuation floor, and extra approval before a sale to a competitor.
- Ask for a carve-out so you are not dragged below the price at which you invested, where that is realistic. ## Common mistakes to avoid - Setting the drag threshold so low that a bare majority can force everyone out, or so high it can never be used.
- Not guaranteeing the minority the same price and terms, which invites disputes and legal challenge.
- Exposing small holders to joint and unlimited warranty liability.
- Forgetting the power-to-transfer mechanism, so a single holdout can block a sale.
- Leaving the come-along in the shareholders' agreement only, without reflecting it in the articles where local law requires that to bind share transfers. ## A note on jurisdiction Come-along and drag-along rights are contractual, but whether they bind a reluctant minority depends on company law, which varies by jurisdiction. In India these rights usually must be written into the company's articles of association, not just the shareholders' agreement, to be enforceable against the company and to bind share transfers, and they sit under the Companies Act, 2013. In the UK, Ireland, Singapore, Australia and the United States the formalities and the protections courts expect for minorities differ. A badly drafted drag can be challenged as unfair to the minority, so the same-terms and minimum-price safeguards matter everywhere. Treat "varies by jurisdiction" as the rule and confirm locally. ## Keeping the exit terms aligned across documents A come-along clause is one of a cluster of exit and transfer terms, alongside tag-along rights, rights of first refusal and transfer restrictions, that decide who can be made to sell, and on what terms. The ongoing work is keeping those terms consistent between the shareholders' agreement and the articles, and knowing exactly what each requires when a sale actually appears. That ongoing work is the idea behind an AI contract workspace. It can hold the shareholders' agreement and the articles as linked documents rather than separate files, show whether a clause sits favourable, neutral or unfavourable to your side, flag where the two documents do not line up, and let you edit wording in plain English with a clean diff. Tools such as [Adira](https://adiralaw.com) are built around that single-workspace idea, tuned to how your company contracts. The guidance above is enough to understand and negotiate a come-along clause on its own; a workspace simply keeps drafting, review and tracking as one connected job.