Drag And Tag Articles Or Shareholders Agreement

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While a "Tag along" clause protects retail investors, a "Drag Along" provision protects the interests of the large shareholder(s). The purpose of a Tag Along provision is to ensure that small shareholders are not left behind if a large shareholder decides to leave the company. (For more information on minority shareholder protection, click here.) The General Court also referred to Western Maharashtra Development Corporation Ltd. v Bajaj Auto Ltd., (2010) 154 Company Cases 593 (Bom), in which a single judge had found that the De Rangaraj case concerned only a case concerning a private undertaking and, consequently, the abovementioned judgment and its judgment in a case concerning Public Ltd Company, are not applicable. The Bombay court ruled that any clause in an agreement limiting the free transfer of shares in public limited companies is null and void and not applicable, even if such a restrictive clause is included in the company`s articles of association. . . .


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