Preemptive Rights | Practical Law

Preemptive Rights | Practical Law

Preemptive Rights

Preemptive Rights

Practical Law Glossary Item 2-382-3697 (Approx. 2 pages)

Glossary

Preemptive Rights

The right of a company's stockholders to have the first chance to purchase shares in a company's future stock issuances. These rights are designed to protect stockholders against dilution of their holdings in the company. Members of a limited liability company (LLC) may also be granted preemptive rights in an LLC’s future issuances of LLC interests.