Anti-Dilution Provisions
Content
Definition
Anti-Dilution Provisions are legal provisions that protect investors from dilution of their ownership percentage if the company issues more shares at a lower price than previously paid.
Usage and Context
Anti-Dilution Provisions ensure that investors don`t lose ownership stake when the company issues more shares at a cheaper rate.
Frequently asked questions
- What are the anti dilution rights of investors? Anti-dilution rights of investors protect their ownership stake from decreasing if a company issues more shares at a lower price than what the investors initially paid.
- What is the anti-dilution clause for founders? The anti-dilution clause for founders helps them keep their ownership stake steady even if more shares are issued, protecting their share of the company.
- What is an example of an anti-dilution provision? An example of an anti-dilution provision is when existing shareholders have the right to buy additional shares at a lower price to maintain their ownership percentage when new shares are issued.
Benefits
Anti-dilution provisions help investors keep their share of the company safe, even if more shares are issued.
Conclusion
In short, anti-dilution rules protect investors from losing ownership when a company sells more shares at a lower price.
