Dividend Board Minutes Template

Dividend board minutes are the written record of the directors’ meeting that considered the dividend. They name the company, say where and when the board met and who attended, and record what was decided. What the minutes actually do depends on the type of dividend.

It depends on the type of dividend and on your articles. Regulation 30 of the Model Articles splits it like this.

Where the shareholders must approve, the minutes set out the ordinary resolution for them to pass. Members can reduce the amount the directors recommended, but cannot approve a higher rate.

Every time the company pays a dividend, even where one person is the only director and the only shareholder. The standard sequence for an interim dividend:

1. 1Convene a directors’ meeting and check that sufficient distributable profit is available by reference to relevant accounts.
2. 2Minute the decision, giving the rate and the dates.
3. 3Prepare a dividend voucher for each shareholder.
4. 4Pay on the payment date and issue the vouchers.

Enough detail for someone who was not there to see what was decided, and on what basis.

• Company name, and the place, date and time of the meeting
• Directors present, or that a quorum was present
• Confirmation that notice was given and the meeting was quorate
• The accounts considered, and whether they were audited
• Share class and nominal value of each share
• Dividend payable per share
• The year the dividend is paid in respect of
• The record date and the later payment date
• The shareholders’ ordinary resolution, where approval is needed
• A resolution that vouchers be issued and payment made
• The chair’s signature and the date

Minute any specific disagreement a director expresses with a resolution.

A company may only pay a dividend out of distributable profits, and the board must check this against relevant accounts. Section 830 of the Companies Act 2006 defines distributable profits broadly as accumulated realised profits less accumulated realised losses.

The relevant accounts are normally the most recent annual accounts. If they show insufficient profit, or the dividend falls in the first accounting period, use interim or initial accounts instead. For a private company these must enable a reasonable judgement on the distributable reserves available.

If the annual accounts carry a qualified audit report, the auditor must state under section 836 whether the qualification is material to the distribution.

Signing is optional but useful. Keep the minutes for at least 10 years.

Drafting

The company secretary usually takes the minutes and circulates a draft to those who attended. Amendments should reflect what was actually said, not what a speaker meant to say.

Signing

Not a legal requirement, but signed minutes are good evidence of the discussion and the agreement reached. The chair normally signs.

Keeping

Directors' minutes are not filed at Companies House. Keep them in the minute book with your statutory records for at least 10 years from the meeting.

Inspecting

Directors may inspect directors' minutes. Shareholders may not: their inspection right covers minutes of shareholder meetings only.

Treating a final dividend as board business

Under the Model Articles the directors recommend a final dividend and the members declare it. Minutes saying the board “resolved to pay a final dividend” describe a decision the board had no power to take.

No reference to accounts

Minutes that declare a dividend without naming the accounts considered leave nothing to show the directors checked for distributable profits. That check is the whole basis for the decision.

Writing them up later

Minutes prepared after the fact, particularly at year end to tidy up payments already made, invite the argument that no decision was taken at the time.

Missing the record date

The record date fixes who is entitled. Without it, a share transfer between declaration and payment leaves the entitlement unclear.

A late dividend waiver

A waiver must be executed as a deed and received by the company before the interim dividend is declared or the final dividend approved. After that, the dividend is a debt and the tax charge stands.

Forgetting the vouchers

The minutes declare the dividend. Each shareholder still needs a voucher recording their share of it.