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


A company must have sufficient distributable profits to pay a dividend, such profits are justified by reference to a company’s most recent annual accounts. These board minutes are based on our standard template board minutes to approve and declare a dividend in cash for a company with model articles (therefore requiring shareholder approval). However, these longer form minutes include a more detailed consideration of the legal requirements for dividends and the company’s financial position. 

The directors, when recommending a dividend, need to satisfy themselves that the dividend is lawful. These longer form minutes allow for a more detailed consideration of the legal and financial basis for the payment of the dividend. This may be important for certain companies given the size of the proposed dividend or to explain why the dividend is being made. It will be up to the directors to decide how much detail to include.

For a company with model articles, this board minutes template should be used. The directors will recommend the dividend payment having considered the legal requirements for the proposed dividend as well as having considered the company’s annual accounts and its financial position. The meeting will then adjourn so that the dividend declaration can be made by shareholders via ordinary resolution at general meeting or by way of written resolution. The 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, the 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 the 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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Long Form Board Minutes to approve Dividend (companies with model articles) is part of Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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