Pro Rata Legal Meaning and Definition

Here is a simplified definition of the legal term Pro Rata.

Pro Rata (adjective)

Pro Rata is a term originating from Latin that means "in proportion." In a legal context, it refers to the division or distribution of amounts, rates, or assets equally based on ownership share or debt owed. For example, if a company goes bankrupt, Pro Rata implies that the remaining assets would be distributed proportionally among its creditors according to the size of their individual debts.