Also known as: payable dates · due date · payment date
Written by attorneys · grounded in primary & secondary sources — see below
The date on which payment or a declared dividend is actually disbursed to the entitled recipient. The interval after the record or due date allows time for processing and preparing payment lists.
Select any source to read its text and confirm it supports the definition.
Patricia Patel holds a promissory note from Prime Logistics with principal due on December 15 and interest payable quarterly. Prime Logistics misses the September interest payment but pays the full principal on December 15. Because the principal due date has not been accelerated, the note does not become overdue on the payable date for the missed interest alone.
Paragon Construction declares a dividend on April 7 with a payable date of April 24. Phoebe Park owns shares on April 7 and sells them to Pierce Patterson on April 8. On April 24 Paragon pays the dividend to Phoebe because she held the shares on the record date even though Pierce owns them on the payable date.
The record date determines which shareholders are entitled to a dividend. The payable date is the later date when the corporation actually mails or transfers the payment. The gap between the two dates, usually two or three weeks, gives the corporation time to update its shareholder list and prepare checks or electronic transfers.
Supporting sources
No. Under the UCC rule, an instrument does not become overdue solely because of an interest default if the principal due date has not been accelerated. The holder may still enforce the note as a holder in due course until the principal itself is in default.
…(1) fails to pay principal when due; (2) fails to make a timely sinking fund payment; (3) fails to pay within 30 days of the due date thereof any interest on the date; or (4) fails duly to observe or perform any of the express covenants or agreements set forth in the agreement. See, e.g. , Brad.Aff.Exh.L, §…