Pro rata is the term used to describe a proportionate allocation. It is a method of assigning an amount to a fraction according to its share of the whole. Pro rata in business financing may be used to identify the amount of shareholders dividend according to its share in the company. For SPVs, pro rata rights identify shareholder’s applicable investment rights that enable them to participate in a subsequent round of funding proportionate to their existing shares in order to maintain their level of percentage ownership in the company.
- Pro-Rata (distribution share allocation)
Term used to describe a proportionate allocation. It is a method of assigning an amount to a fraction according to its share of the whole. Pro rata calculations are used to determine distribution amounts investors. - *Pro-Rata (Right of First Refusal)
The right of a shareholder to purchase shares in a future financing to maintain their percentage of ownership in a company.