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What is a pre emption clause?

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Anonymous

13y ago
Updated: 4/8/2023

Apreemptive right or preemption clause is that acurrent shareholder can maintain their fractional ownership of a company by buying a proportional number of shares of any future issue of common stock. Most states consider preemptive rights/clause valid only if made explicit in a corporation's charter. also called subscription privilege or subscription right.

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Winona O'Kon

Lvl 13
2y ago

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