A “tag-along”
right allows a minority shareholder to join a sale initiated by a majority shareholder, essentially letting them sell their shares at the same price and terms as the majority shareholder, while a
“drag-along”
right forces a minority shareholder to sell their shares alongside the majority shareholder if the majority decides to sell their stake, ensuring a complete sale of the company;
in essence, tag-along protects the minority shareholder from being left behind in a sale,
while drag-along gives the majority shareholder power to compel a complete sale by forcing all shareholders to participate.