Preferent

Preferent is a term used in finance and law to denote priority or favorable status granted to certain claims or securities. The word, derived from the Latin praeferre (to prefer), appears in several jurisdictions with related but distinct meanings.

In corporate finance, preferente or preferred shares are a class of stock that has priority over ordinary shares in receiving dividends and, in the event of liquidation, in the distribution of assets. They typically carry a fixed or minimum dividend, may be cumulative or non-cumulative, and often have limited or no voting rights. Some preferred shares are redeemable or convertible into ordinary shares. The exact rights and limitations depend on the issuing document and applicable law.

In insolvency and creditor hierarchy, preferente or preferential claims are those that are paid before unsecured creditors. This category can include certain taxes, employee wages, and secured debt to the extent defined by statute or contract. The renewal, ranking, and treatment of these claims vary by jurisdiction, reflecting differences in insolvency regimes and creditor protection rules.

In practice, issuing preferente shares can influence corporate control and financing strategies, since these shares may provide capital with priority returns while sometimes limiting voting influence. The term is common in several European legal contexts (for example in Dutch or German law) and is often translated as “preferred” in English, though usage and specifics may differ by country.

See also: preferred stock, preferred claim, liquidation preference.