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preemptive right

   Also found in: Dictionary/thesaurus, Legal, Wikipedia 0.01 sec.
Preemptive right
Common stockholders' right to anything of value distributed by thecompany.
preemptive right
A stockholder's right to keep a constant percentage of a firm's outstanding stock by being given the first chance to purchase shares in a new stock issue in proportion to the percentage of outstanding shares already held. Not all firms provide the preemptive right, which is more important to stockholders owning a significant part of a company. Also called subscription privilege. Compare privileged subscription. See also special subscription account.
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