Where a company proposes to issue new shares, existing shareholders may have the right to be offered a pro-rata part of the new shares before they are offered to a new shareholder.
Pre-emption rights are contained either in the Articles of Association or imposed by the Companies Act 2006 (Section 561) but may be disapplied either by a provision in the Articles of Association or a special resolution. In relation to sales of existing shares, similar rights require a shareholder wishing to sell shares to offer them first to existing shareholders before being able to transfer to outsiders. These rights are common for private companies.