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Pro rata is a legal Latin phrase meaning “in proportion” or “proportional” as determined by a specific factor. In the company law context, the phrase is often used in conjunction with an existing shareholder’s right of first refusal, or “pre-emption rights” for new share issuances. In such instances, shareholders who have pre-emption rights must be offered that percentage of new shares which is pro rata to their existing shareholdings.

“Because the company issued pro rata dividends, every shareholder received a distribution in proportion to the number of shares owned.”