Legal Definitions - ratable

Ratable describes something that can be proportionally divided, assessed, or estimated in a fair or equitable manner. It often refers to a share or amount that is determined in proportion to a larger whole, or an item that is capable of being valued for a specific purpose, such as taxation.

• Proportionate Distribution of Assets: Imagine a small business with three partners that decides to dissolve. After selling all assets and paying off all debts, there is a remaining sum of money to be distributed among the partners.

  This remaining money would be divided among the partners based on their ratable share, meaning each partner receives a portion directly proportional to their ownership percentage in the business. For instance, if one partner owned 50% of the company and the other two owned 25% each, the distribution of the remaining funds would reflect those exact proportions.

• Apportionment of Shared Costs: Consider a multi-tenant industrial park where several companies share common facilities like a large parking lot, security services, and exterior maintenance.

  The landlord would typically calculate the total cost of these shared services and then assign each tenant a ratable share of these expenses. This apportionment might be based on factors such as the square footage each tenant leases or the number of employees they have, ensuring that the costs are fairly distributed according to their usage or capacity.

• Valuation for Local Taxation: A county government needs to determine the property taxes for all residential homes within its boundaries.

  Each home is assigned a ratable value, which is an official assessment of its worth for the specific purpose of calculating property taxes. This assessed value allows the county to apply a consistent tax rate across all properties, ensuring that each homeowner pays a tax amount that is proportionate to the estimated value of their property.