What is "preemptive right"

alt. (context legal English) 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 n. (context legal English) 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

n. the right granting to shareholders the first opportunity to buy a new issue of stock; provides protection against dilution of the shareholder's ownership interest