Preemptive-right meaning

The right of a company's existing stockholders to purchase enough shares to maintain their overall ownership percentage in the event of a new stock issue.
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A right given to shareholders to retain the same percentage of ownership they currently have if new shares are issued. Preemptive rights prevent the current owners’ stake and control from being diluted. Preemptive rights usually are transmitted by giving existing shareholders a subscription warrant that spells out how many new shares they are entitled to buy. Preemptive rights often exist only if they are listed in the corporation’s charter.
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The right to the first opportunity to claim land subject to being preempted; the right of existing shareholders in a corporation to have the first opportunity to buy new shares when issued.
noun
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(law) The right of shareholders to maintain a constant percentage of a company's shares by receiving a proportionate fraction of any new shares issued, thus preempting any dilution.
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