Board Minutes to approve Dividend (companies with modified model articles)

In order to pay a dividend, companies should hold a board meeting where the directors may, if permitted by the company’s articles of association, recommend and declare a dividend. This template board minute can be used to record the directors’ recommendation, declaration and payment of a dividend without recourse to shareholders.

What these board minutes record

These minutes are intended for companies whose articles allow the directors to recommend and declare dividends (final as well as interim), or where the articles are silent on the point. For many SMEs, this means the dividend process is handled at board level.

Articles of association: when shareholder approval may be needed

If a company has the unmodified model articles for a private company (i.e. Article 30 is still in place), it is generally accepted practice that, whilst the directors can resolve to recommend a dividend, a final dividend should be declared by shareholders by ordinary resolution at a general meeting or by written resolution.

If that applies, the alternative board minute for companies with model articles should be used instead.

Interim dividends

Interim dividends are usually decided solely by the board of directors, whether or not the company has model articles. This template may therefore be used to recommend and declare an interim dividend, notwithstanding the type of articles a company has.

Further details on dividends and the process for declaring and paying them are available in Guidance Note: Dividends.

Record-keeping and evidence

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

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