Also known as: pro-rata shares · prorata shares · pro rata · prorata
Written by attorneys · grounded in primary & secondary sources — see below
A proportional allocation of shares or assets among shareholders or claimants according to their respective ownership interests or claim amounts. The allocation ensures each participant receives a portion scaled to its relative stake without favoritism or arbitrary adjustment.
Precision Tools sold substantially all its assets and sought to distribute the proceeds. The board calculated each shareholder's ownership percentage and paid Paul Peterson and Pioneer Energy their respective portions scaled to the number of shares each held. This method satisfied the requirement that distributions occur proportionally among holders of the same class.
Prime Logistics declared a ten-percent stock dividend on its common shares. The board issued additional shares to each holder, including Perry Pratt and Prosperity Investments, in direct proportion to the shares already owned. Because the articles contained no contrary provision, the issuance qualified as a share dividend allocated uniformly.
Select any source to read its text and confirm it supports the definition.
After a jury found Pavel Petrov and Philip Powell jointly liable for a products defect, the court assigned fault percentages. Each defendant then contributed to the judgment in proportion to the fault assigned rather than in equal dollar amounts.
Following a multi-vehicle accident, the jury allocated percentages of fault to Peter Park and several other drivers. The court required each defendant to pay a share of the damages matching its assigned percentage of fault instead of dividing liability equally.
Investors who neither purchased nor sold shares of the defendant company sought to join a class action alleging misleading statements. The court limited participation to those who actually transacted in the securities, excluding non-traders from any recovery pool.
Sellers of tribal corporation stock failed to disclose material information to buyers. The court applied a presumption of reliance for the omitted facts and permitted recovery scaled to each plaintiff's proportionate interest in the transaction.
A corporation may issue shares pro rata and without consideration to its shareholders or to the shareholders of one or more classes or series unless the articles of incorporation provide otherwise. The issuance constitutes a share dividend.
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A unanimous shareholder agreement may govern the authorization or making of distributions even if the distributions depart from strict pro rata ownership percentages, provided solvency requirements are met.
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The corporation calculates each shareholder's ownership percentage within the relevant class or series and distributes assets in that exact proportion. Selective exclusions based on length of ownership or perceived motives violate the rule.
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Under comparative contribution statutes, each tortfeasor's payment obligation equals its percentage of fault rather than an equal division. The relative degrees of fault determine the shares after the plaintiff has been paid in full.
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…was to be merged into a new company; and 55% of the common shares of the new company were to be offered to the former users on a pro rata basis, determined by the quantity of stamps issued to each of these nonshareholding users during a designated period. Some 621,000 shares were thus to be offered in units, each consisting…