Board Minutes – Recommendation & declaration of dividends

Board Minutes – Dividends

CO.DIVI.02
Companies must hold a board meeting where the directors will recommend and declare a dividend. These template Board Minutes – Dividends can be used to record the directors’ agreement to a dividend declaration.

The process of declaring a dividend is largely governed by a company’s articles of association. For most SME companies this will only involve a board meeting of the directors to recommend and declare the dividend. Larger private companies and public companies may require a shareholders resolution in addition, however this board minute has been drafted on the basis that the directors have the power to both recommend and declare a dividend. Further details regarding what dividends are and the process of declaring and paying dividends 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 by directors to record the dividend payment. These board minutes must be kept as part of a company’s general records and also 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 recommending and declaring 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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