Long Form Board Minutes to approve Dividend (companies with modified articles)

A company must have sufficient distributable profits to pay a dividend. Those profits are typically evidenced by reference to the company’s most recent annual accounts.

These long form board minutes are based on the standard board minutes used to approve and declare a cash dividend for a company with modified model articles (so the directors both recommend and declare the dividend, without recourse to shareholders). They include a more detailed consideration of the legal requirements for dividends and the company’s financial position.

When are these long form board minutes useful?

As the directors will both recommend and declare the dividend, they need to satisfy themselves that the dividend is lawful. This template allows the board to record a fuller rationale and analysis where that is appropriate.

• Where the size of the proposed dividend warrants a more detailed explanation.
• Where the directors want to record the legal and financial basis for the dividend in more detail.
• Where it is helpful to explain why the dividend is being made.

It is for the directors to decide how much detail to include.

Do not use this template for companies with model articles

If the company has model articles, this template should not be used. The board minutes for companies with model articles should be used instead, as shareholder approval will be required.

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 must be recorded. These minutes can be kept with the company’s records and may be required by HMRC as evidence that a dividend was properly recommended and declared.

Long Form Board Minutes to approve Dividend (companies with modified articles) is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.