A share in a company having a special right or privilege attached to it, distinguishing it from the company's common shares. Most commonly that special right is a preference over holders of common shares when dividends are declared. Another possible right is for the preferred shares to be redeemable at the option of either the holder or the company. Still another might be to disallow voting rights to preferred shareholders. Depending on the laws in each state, there may be no limit to the qualifications a company can attach to preferred shares.