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Simple English definitions for legal terms
record date
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A quick definition of record date:
A record date is a specific date set by a company for shareholders to be eligible to receive dividends or vote on important matters. It is also known as the date of record. If you own shares in a company on or before the record date, you are entitled to receive dividends or vote on important matters. The record date is important because it helps the company determine who is eligible to receive dividends or vote on important matters.
A more thorough explanation:
Definition: The date on which a stockholder must own shares to be entitled to vote or receive a dividend.
Example: If a company declares a dividend on May 1st, the record date might be set for May 15th. This means that shareholders who own the stock on May 15th will be eligible to receive the dividend.
Explanation: The record date is important because it determines which shareholders are eligible to receive a dividend or vote on company matters. Shareholders who own the stock on or before the record date are considered "shareholders of record" and are entitled to these benefits. The record date is set by the company's board of directors and is usually a few weeks after the dividend is declared.