What is a preemptive rights?

Definition preemptive rights

How do we define: preemptive rights?


Preemptive Rights are the rights delineated in the articles of incorporation granting shareholders the first opportunity to buy a new issue of stock in proportion to their current equity percentage. The purpose of preemptive rights is to protect shareholders from dilution of value and control when new shares are issued.


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Incorporating

Corporate Glossary