If the right to require a share transfer is registered in the register maintained by the central securities depository, then yes. The entitled shareholder may transfer the obliged shareholder's shares to the buyer, acting in the name and on the account of the obliged shareholder, provided the purchase price for the obliged shareholder has been placed in notarial escrow or opened on an irrevocable letter of credit and satisfaction of the conditions has been certified by a notary. Where the drag-along is unregistered, no such route exists and what remains is court enforcement, which the Act confers on the acquirer of the shares.
A buyer wants the whole company, the majority shareholder has agreed a price with them and the shareholder agreement contains a drag-along. The minority shareholder, however, will not sign the transfer agreement, does not respond or claims that the conditions for exercising the right have not been met. Whether the deal stalls is determined, in a simple joint-stock company, above all by whether the right to require a share transfer was registered in the register maintained by the central securities depository.
A registered right: a transfer without the obliged shareholder’s signature
Where the right is registered, the Act gives the entitled shareholder a tool that requires neither the obliged shareholder’s cooperation nor a judgment:
Where the conditions for exercising a right to require a share transfer that has been registered under special legislation are met, and the purchase price for the obliged shareholder has been placed in notarial escrow or an irrevocable letter of credit has been opened in the obliged shareholder’s favour, and satisfaction of those conditions has been certified by a notary, the entitled shareholder may transfer the obliged shareholder’s shares concerned to a third party, acting in the name and on the account of the obliged shareholder.
— Section 220y(4) of Act No. 513/1991 Zb. (unofficial English translation)
The Securities Act follows on from this: the entitled shareholder submits the instruction to register the transfer in the name of the obliged shareholder as transferor, and the central securities depository or the member will execute it if the entitled shareholder attaches the notary’s certificate (Section 107m(2) of Act No. 566/2001 Coll.). The procedure has three fixed points: the conditions of exercise under the shareholder agreement are met, the price for the obliged shareholder is secured in escrow or by a letter of credit, and a notary certifies this. The depository does not assess the conditions itself; it will execute an instruction submitted in the name of the obliged shareholder only if the notary’s certificate is attached to it.
Where the transferability of the shares is subject to the company’s consent and that consent was given on creation of the right, it is not required again on its exercise (Section 220p(2) of the Commercial Code). In such a case, exercise of the right cannot be delayed by the company refusing consent either.
An unregistered arrangement: only a claim before the court
If the drag-along remained merely in the text of the shareholder agreement, the entitled shareholder cannot transfer the obliged shareholder’s shares themselves. On breach of an unregistered right, the Act confers a claim on the acquirer of the shares: they may require the obliged shareholder to transfer the shares concerned to them on the terms on which they acquired the entitled shareholder’s shares, failing which the right to require a transfer is preserved (Section 220y(5)). The claim to a transfer lapses if the acquirer does not pursue it within one year of the transfer of the entitled shareholder’s shares (Section 220y(6)).
The buyer would therefore first have to buy the majority block and then litigate over the rest with a shareholder they did not choose, which they will usually reflect in the price or in the terms of the deal. Where a drag-along is not registered, it is therefore advisable to add contractual penalties or other sanctions to the shareholder agreement designed to bring the obliged shareholder to sign voluntarily.
What must be agreed in advance
The notary certifies that the conditions for exercising the right are met. The arrangement on the right to require a share transfer must contain them, together with the extent to which the entitled shareholder may exercise it, or the method of determining that extent (Section 220y(3)). If the shareholder agreement speaks only of ‘an offer from a third party at a reasonable price’, a notary will struggle to assess whether the conditions have arisen. The conditions must be formulated so that they can be proved by documents: who the third party is, what stake they must wish to buy, how and within what period notice is served on the obliged shareholder, and what counts as the same terms as regards price, warranties and method of payment.
Creation of the registered right itself requires a notarial deed or, from 17 August 2026, an agreement authorised by a lawyer (Section 220w(3) of the Commercial Code). To register the right, the depository must receive written confirmation of the content of the shareholders’ agreement bearing the officially certified signatures of both the entitled and the obliged shareholder (Section 107l(4) of Act No. 566/2001 Coll.). A registered right then also takes effect against the obliged shareholder’s legal successor (Section 220w(4) of the Commercial Code), so it is worth setting its conditions precisely when it is created.
How to proceed
If a minority shareholder refuses to sell, first check in the extract from the register of rights to require a share transfer whether the drag-along really is registered and which shares it covers. Notarial escrow or a letter of credit in the obliged shareholder’s favour must then be arranged, together with the documents from which the notary will assess satisfaction of the conditions. We deal with the structuring and registration of the right through our registered rights in a j. s. a. service, and with contractual protection for unregistered arrangements through shareholder and member agreements. The difference between a drag-along and a tag-along is explained in what drag-along and tag-along mean, and amendment and deletion of registered rights in how to amend or delete a registered tag-along and drag-along.
This answer provides general information on the law as at 12 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
