Board Minutes – Declaration of Dividends by Shareholders

Board Minutes – Dividends (companies with model articles)

CO.DIVI.08

The process of recommending and declaring a dividend is largely governed by a company’s articles of association. Companies with private company model articles of association where no amendments or modifications to the articles have been made will be bound to adhere to Article 30 of these articles. This states that whilst directors may resolve to recommend dividends, a final dividend should be declared by the shareholders at general meeting or by way of written resolution. In contrast, interim dividends may be declared and paid solely by the board of directors whether the company has model articles or not.

For a company with model articles, this template board minute should be used. The directors will recommend the dividend payment and then adjourn the meeting so that the dividend declaration can be made by shareholders via ordinary resolution at general meeting or by way of written resolution. Our template shareholders’ ordinary resolution should be used to pass the necessary resolution.

For companies with modified model articles that do not include Article 30 or set out an express process for recommending and declaring dividends solely by the directors, our board minutes for companies with modified articles should be used instead. Further details regarding what dividends are and the process for their declaration and payment are available in our Guidance Note: Dividends .

Once a board agrees to distribute dividends, this fact must be recorded. These board minutes can be used as a record of a dividend payment and kept as part of the company’s general records in case they are subsequently required by HMRC as evidence that a dividend was properly recommended and declared.

These Board Minutes go through the procedural requirements that the board will need to follow during the process of paying a dividend and are in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

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