Pre-Emptive Right
/ˌpriː ɪˈmptiːv raɪt/
Definitions
- (n.) A shareholder's statutory or contractual right to purchase additional shares in a corporation before new shares are offered to outside investors, preserving their proportional ownership.
The investor exercised her pre-emptive right to maintain her voting power in the company.
Forms
- pre-emptive right
- pre-emptive rights
Related terms
See also
Commentary
Pre-emptive rights are critical for protecting existing shareholders from ownership dilution during new equity issuances, often requiring clear statutory or contractual language to avoid ambiguity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.