A Guide to Shareholder Rights

Liquidation Preference

Shareholder receives priority in being paid out in the case of a liquidity event

Voting Rights

Shareholder has the right to vote on company bylaws, board members, etc.

Tag Along Rights

Minority shareholders can sell their shares, or ‘tag along’, in the event a majority shareholders sells.

Drag Along Rights

Majority shareholders can force minority shareholders to sell shares in the case of a company merger/sale.

Preemptive Rights

Existing shareholders can buy newly issued shares before it’s offered to others.