Preemptive rights

Shareholders want priority to acquire interests that another shareholder decides to sell, or to subscribe for new capital issuances.

Preemptive rights over new issuances

Article 194 of Law 19,550 grants shareholders preemptive and accretion rights to subscribe for shares issued in a capital increase, in proportion to their holdings. It is the main defense against dilution.

This statutory right may be reinforced and detailed in the bylaws or in the shareholders' agreement, specifying deadlines, methods of exercise and the consequences of not exercising it.

Preemptive right in the transfer of interests

In addition, shareholders may agree on a preemptive right to acquire the interests or shares that another shareholder wishes to transfer, thereby controlling the entry of third parties into the capital.

We design the procedure: notice of the offer, the period to exercise the preemptive right, equivalent conditions, and the effects of failing to exercise it, aligning it with the bylaws.

Common mistakes

• Confusing the preemptive right under art. 194 with the transfer preemptive right
• Failing to set clear deadlines for exercising the right
• Omitting the accretion right and facilitating dilution
• Drafting ambiguous notification procedures

Frequently asked questions