Written resolution of sole director to pay interim dividend

The decisions of sole directors need to be recorded properly in case there is a challenge to their actions. This resolution records the decision of a sole director to pay an interim dividend to the shareholder(s).

Making a distribution

There are various factors that must be taken into account when deciding to make a distribution. Our Distribution Flow Chart summarises this process and our Minute of Board Resolution to Pay Interim Dividend can be used for a decision made by a board.

A sole director can follow the same procedure to pay an interim dividend. Their decision must also be recorded, confirming that the correct procedure has been followed.

Tip

Check the company’s articles to make sure that a sole director can act and that this is not a decision that has been restricted. Usually, sole directors are not required to follow any of the articles’ procedures for directors’ decision making. However, if any specific requirements are included in the articles, these must be followed.

General duties

Sole directors must abide by their duties in running the company (see Directors’ Duties Summary). In particular, their duty to promote the success of the company for the benefit of its members as a whole requires them to take certain factors into account when taking any decision:

• the long term consequences of the decision
• the interests of the employees
• the need to foster business relationships with suppliers, customers and others
• the impact of the company’s operations on the community and the environment
• the desirability of maintaining a reputation for high standards of business conduct; and
• the need to act fairly between members.

If the company is in financial difficulties, decisions must be made in the creditors’ interests, not the shareholders’.