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Preemptive rights are important to shareholders because they allow existing investors to maintain their proportional ownership in a company when new shares are issued. This helps prevent dilution of their voting power and economic interest. By exercising these rights, shareholders can protect their investment value and ensure they have a say in corporate decisions. Overall, preemptive rights serve as a safeguard for shareholders against unwanted changes in ownership structure.

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1mo ago

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What is a preemptive right and how does it benefit the stockholder?

Preemptive right is the right belonging to existing shareholders of a corporation.


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In a corporation the voting shareholders hold the right to elect the Board of Directors. Each share represents one vote.


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Stock dividends are a right if the company is in profit and the shareholders approve the dividend payment.


Which is the most important fundamental right and why?

most important fundamental right is right to freedom because every one has right to do what one wants.


What legal rights does a shareholder in a private company have?

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A company owned by a group of people called shareholders is known as a corporation. In this structure, shareholders hold shares of stock, representing their ownership in the company and their claim on its assets and profits. Corporations can be publicly traded, allowing shares to be bought and sold on stock exchanges, or privately held, with shares owned by a smaller group of individuals or entities. The shareholders typically have the right to vote on important company matters, including the election of the board of directors.


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