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Antedating or backdating is the act of applying a date in the past to a document or transaction. It is commonly used in commercial matters, accounting, and commercial instruments. While it can be legitimate, it often carries the suggestion of fraud or underlying illegality. Legitimate reasons for antedating include paperwork sorting, replacing a previously written check, and government arrangements for benefit filing deadlines. However, antedating employee stock options is sometimes fraudulent and carries a public presumption of fraudulence. The most important thing to remember about using an antecedent is that even legitimate uses sometimes carry the stigma of fraud.
To precede, or to go back, is to apply to something a date that has passed. The term is most often used in commercial matters, in accounting, and in conjunction with commercial instruments. Instead of using the actual date a contract or check is signed, for example, a party to the transaction might choose to use a date in the past. There are a number of legitimate reasons for a person to use a record, although government regulations sometimes affect the legal enforceability of outdated instruments.
Preceding or reversing a transaction often comes with the suggestion of fraud or underlying illegality. After all, many people would see no reason not to use the actual date of the transaction when signing the instrument. Although the practice of prior transactions has historically been the basis of corporate, accounting, and tax fraud, there are legitimate reasons for using a prior. For example, a landlord might give a tenant the keys to an apartment at the beginning of the month, but not provide the lease to sign until a week later. In that case, it would be a legitimate recourse to predate the contract at the beginning of the month, rather than using the effective date of signing.
Checks can also use a background without affecting the negotiability of the instrument. The US Uniform Commercial Code, for example, allows foraging as long as the check is cashed or deposited within six months of the issue date. An advance check can legitimately be used to perhaps replace a previously written check that was dated in the past, or to sort out a party’s paperwork for filing purposes; If the feedback is used to avoid paying taxes, it will be considered fraud and the background will not be taken into account.
Government agencies sometimes make arrangements for one party to precede a claim when it comes to a benefit filing deadline. If the party can show a good reason for not filing within the deadline, the law may legitimately allow the claimant to withdraw the claim or eligibility application. Again, there is a big difference between using a record pursuant to a legal remedy and using it to fraudulently present an expired claim.
Perhaps the most sensational use of backdating that may be legitimate but is sometimes fraudulent and carries a public presumption of fraudulence is the corporate practice of backdating employee stock options. Large corporations often provide incentives to employees by allowing them to purchase stock with options dated to a point in the past when the stock was trading at a lower price than it is today. The US Internal Revenue Service allows this practice as long as it is not used to avoid taxes or defraud shareholders.
The word “antecedent” has a simple meaning and legitimate uses. The practice does not invalidate an instrument or transaction by itself, but simply affects the length of time that the instrument or transaction remains valid. The most important thing to remember about using an antecedent is that even legitimate uses sometimes carry the stigma of fraud, because the practice has often been misused for illegal purposes.
Smart Asset.
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