Directors' Resolution to Pay a Dividend (Circulating Resolution)
This Directors' Resolution can be used to decided, on behalf of the company, to pay a dividend to shareholders.
(0 reviews)
Last updated January 15, 2025
Under 3 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
A company can pay dividends to its shareholders upon a resolution of the board. Under section 249T of the Corporations Act 2001 (Cth), the company can only pay dividends where:
- its assets exceed its liabilities;
- the payment of the dividend is fair and reasonable to the shareholders; and
- the payment of the dividend does not prejudice the company's ability to pay its creditors.
This resolution is effective for both final and interim dividends.
The company should be careful with how it structures its dividend payment. It should follow the procedure set out in replaceable rule 249U of the Corporations Act 2001, or the company constitution if it specifies such a procedure. Any complex details should be advised on by a lawyer.
This resolution can be inserted into:
Where you wish to pass the resolution in a directors' meeting, you must use the documents above. Simply copy and paste the text of the resolution.
The Legal Risk Score of a Directors' Resolution to Pay a Dividend (Circulating Resolution) Template
Our legal team have marked this document as medium risk considering:
- This is a standard document.
- The resolution relies on the unanimous consent of all officeholders, which could delay or complicate the appointment process if consensus is not readily achieved.
- This resolution must be carried out within other dividend distribution processes in order to be effective.
Users familiar with corporate transactions will find the document straightforward, but should remain cautious about these gaps and consider additional safeguards or clarifications to mitigate potential risks.
Directors' Resolution to Pay a Dividend (Circulating Resolution) Checklist
Complete your free Directors' Resolution to Pay a Dividend (Circulating Resolution) with our checklist
Verify Signatures
Ensure that all officeholders who are entitled to vote have signed the document to confirm their unanimous agreement on the resolution.
Record Keeping
Maintain a copy of the signed resolution in the company’s records for legal and administrative reference.
Carry out Dividend Distribution
This is a complex issue and it is recommended that you consult a lawyer.
View Sample Directors' Resolution to Pay a Dividend (Circulating Resolution)
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