A pre-emption right, right of pre-emption, or first option to buy is a contractual right to acquire certain property newly coming into existence before it can be offered to any other person or entity.

What is the meaning of pre-emption rights?

A preemptive right is essentially a right of first refusal. The shareholder may exercise the option to buy additional shares but is under no obligation to do so. The preemptive right clause is commonly used in the U.S. as an incentive to early investors in return for the risks they undertake in financing a new venture.

What is the meaning of pre-emption?

1a : the right of purchasing before others especially : one given by the government to the actual settler upon a tract of public land. b : the purchase of something under this right. 2 : a prior seizure or appropriation : a taking possession before others.