At some point between dress rehearsals and first audience you will have to sit down with the director and the house manager to discuss the late seating policy for your production.
At its simplest, late seating is for all those people who, for one reason or another, missed the bus. It's a chance for them to get in to see the show with as little interruption as possible to the action that takes place on the stage and the distraction it may have for audience and actors alike.
There are always mitigating factors involved in late seating. Here are some, but you should be sure to include your house manager and not just the whim of the artistic staff. When there are questions, seek advice from the general manager, theatre owner, production manager, etc. Anyone who has experience in the event that you don't.
In one act plays or plays without intermissions there can be a situation where the patrons won't see the show at all. Is it possible they can get a refund? Is it printed on the tickets? Could you perhaps resell the ticket putting a new patron into a late comers seat and is it legally covered in all advertisements and on the tickets and entrances to the theatre? On the web site?
It's important to flesh this out prior to having an audience. In addition, you will need a way to notify the house manager when that moment arrives where late seating can take place in the case where they cannot see the action on the stage. This can be done in many ways bus some of the most common are to have walkie-talkies and bell systems where you can notify them directly.