An amount to be appraised or apportioned. For example, the Internal Revenue Code § 306, which describes the tax treatment of income from the sale of stock, exempts “such stock’s ratable share of the amount which would have been a dividend at the time of distribution”—i.e. the amount of the value of the stock which would have been attributable to dividend distributions at the time of the sale is not taxed as income. Apart from the context of tax, the term ratable may also come up when looking at recovering contributions from a shared entity. For example, the California Corporate Code § 8721 provides that, in the context of a wind up of a corporate entity, “any member who has been compelled to return to the corporation more than the member’s ratable share of the amount needed to pay the debts and liabilities of the corporation may require that the corporation recover from any or all of the other distributees such proportion of the amounts received by them upon the improper distribution as to give contribution to those held liable under this section and make the distribution of the assets fair and ratable.” That is, if an investor of a dissolving corporation contributed more than was needed to satisfy their proportionate share of the corporation’s liabilities, then they can receive their share of the surplus contribution.
[Last updated in November of 2020 by the Wex Definitions Team]