Board Minutes to approve Dividend (companies with model articles)

The process for recommending and declaring a dividend is largely governed by a company’s articles of association. Companies with the unmodified model articles for a private company are bound by Article 30, which provides that, whilst directors may resolve to recommend dividends, a final dividend should be declared by shareholders at a general meeting or by 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.

When to use these board minutes (companies with model articles)

Use this template where the company has private company model articles that have not been amended or modified. The directors will recommend the dividend payment and then adjourn the meeting so that shareholders can declare the final dividend by ordinary resolution at a general meeting or by written resolution.

A shareholders’ ordinary resolution should be used to pass the necessary resolution.

If your articles are modified

If the company has modified model articles that do not include Article 30, or which set out an express process allowing dividends to be recommended and declared solely by the directors, the alternative board minutes for companies with modified articles should be used instead.

Further guidance and record-keeping

Further details on dividends and the process for their declaration and payment are available in Guidance Note: Dividends.

Once a board agrees to distribute dividends, that decision should be recorded. These minutes can be kept with the company’s records and may help evidence that a dividend was properly recommended and declared if this is later required by HMRC.

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