WHAT ARE BOARD MINUTES APPROVING A DIVIDEND?

These minutes reflect the decision of the board of directors to pay dividends to the shareholders. Even if a company has made a profit within a quarter; dividends will not be paid to shareholders until after the board of directors convene and decide whether or not it would be an appropriate and a financially sound move to pay dividends to the shareholders.

WHEN DO YOU NEED BOARD MINUTES APPROVING A DIVIDEND?

The Board minutes approving a dividend are always needed before shareholders can be paid dividends. The minutes are also needed when the profitability and stability of the company needs to be examined because this document should include all aspects of the company that would reveal its financial well-being or lack thereof.

WHAT IS INCLUDED IN BOARD MINUTES APPROVING A DIVIDEND?

The AGM Board pack includes the following:

• The board meetings should summarize the process and actions taken by the board in order for it to reach the decision to pay dividends.

• The minutes should indicate how the dividends will be paid and in what form; whether the dividends will be paid by awarding additional shares of stock or whether the dividends will be paid in cash.

• The minutes should also indicate when the dividends will be paid. The board of directors can determine whether to pay the dividends soon after a quarter that has made a lot of profit or the board can wait until the end of the year to pay the dividends.

• The minutes should summarize the analysis undertaken by the board to assess the long-term investment goals as well as the financial stability of the company and its current financial situation including an analysis of the operating capital of the company.