equity, contractsI have recently applied for a job position here in Portugal, the company offered me an equity contract, where I should commit my self for x years in exchange of some equity. My position will be developer in PHP and HTML.
In the contract for equity there is a note, which translate plus/minus in this:
Duty of transfer (drag along)
If the founding shareholders (the owners) at any time decide to sell their entire shares in the Company to a third party, the accession shareholders (in this case myself) is obligated to transfer their shares.
Terms and conditions for accession companions will be able to be different in that the extent to which will be more advantageous for them.
I definitely should consult a legal expert, but I would like to have your opinion:
Thanks
Drag along clauses are fairly standard in my experience.
In my previous company we had drag along clause which meant that if people owning a combined 75% of the shares wanted to sell the company then everyone had to agree and go with the sale.
if you imagine a situation where such a clause did not exist then you could be in a situation where someone with 99% of the shares wanted to sell their company and someone owning 0.1% of the shares saying, “no” and it would stop the deal because they were not ‘dragged along’
This clause is not something that I’d personally be concerned about
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