Introduction to this document

Minute of board resolution to

recommend final dividend

Only shareholders can approve the payment of a final dividend. However, it must be recommended by the directors first, on the basis of a careful consideration of the company’s financial situation. Our model shows you how to document this decision.


In most companies, the articles call for the shareholders to declare a final dividend by way of ordinary resolution. Firstly, the dividend must be recommended by the directors after they have considered the relevant accounts and concluded that the company can afford it (see our Distribution Flow Chart for how to do this). The model assumes that the company’s initial/annual accounts show that it has sufficient distributable profits to pay the dividend. If the company had to refer to interim accounts, or if its auditor qualified the accounts, this will need to be reflected in the minutes.

The directors’ recommendation needs to be recorded to show that they have taken all the relevant factors into account. If a dividend is unlawful, it will have to be repaid and the directors may incur personal liability.

Dividend details

The minutes need to specify the amount of the dividend. The shareholders usually approve the dividend at the amount recommended (their only alternatives are to withhold their consent to the dividend altogether or approve a lower dividend). The directors also need to state which shareholders will receive it the dividend, according to the articles and share rights. In larger companies with lots of shareholders, it is advisable to set a cut-off date after which any new shareholders cannot participate in the dividend. So, all shareholders (in a particular class, if only one class is to receive a dividend) on the register of shareholders on a particular date will receive the payment. This is referred to as the “record date”.

Next steps

See our Dividend Checklist for the next steps in the process.