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Simple English definitions for legal terms
distribution
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A quick definition of distribution:
Distribution: When someone dies and leaves behind a will or trust, their assets are divided among the people they named in the document. This is called distribution. It can also refer to when a company pays out profits to its shareholders or when an investment company sells securities and gives the profits to its investors. In an initial public offering, the underwriter sells the securities issued by a corporation.
A more thorough explanation:
Distribution
Distribution refers to the act of dividing assets among beneficiaries as specified in a trust or will by a court. It can also refer to:
- The payment of capital gains from an investment company to shareholders when securities are sold or profits are paid to shareholders as dividends from a corporation.
- The sale of securities issued by a corporation by an underwriter during an initial public offering.
When a person creates a trust or will, they may specify how their assets should be distributed among their beneficiaries. For example, a person may leave their house to their children and divide their savings equally among their grandchildren.
When an investment company sells securities, they may distribute the capital gains to their shareholders. For example, if an investment company sells stocks for a profit, they may distribute a portion of that profit to their shareholders.
When a corporation makes a profit, they may distribute some of that profit to their shareholders as dividends. For example, if a corporation makes $1 million in profit, they may distribute $100,000 to their shareholders as dividends.
During an initial public offering, an underwriter may distribute securities issued by a corporation to investors. For example, if a corporation issues 1 million shares during an IPO, the underwriter may distribute those shares to investors who have purchased them.
Distribution is the act of dividing assets among beneficiaries as specified in a trust or will by a court. The examples illustrate how assets can be distributed in different contexts, such as when securities are sold, profits are made, or securities are issued during an IPO. In each case, the distribution involves dividing assets among different parties according to specific rules or agreements.