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Board Resolution for Declaration of Dividend
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors
________________
CIN: ________________
Date of Meeting: __________
Time: __________
SUBJECT: DECLARATION OF INTERIM DIVIDEND
RESOLVED THAT an interim dividend of Rs. /- per equity share at the rate of ____% on face value of Rs. ____/- be declared for FY ________.
Record Date: __________
Total Dividend: Rs. ________________/-
Signature
Board Resolution for Declaration of Dividend
Professional Format Guide for Indian Companies
Introduction
A Board Resolution for Declaration of Dividend is a formal corporate document that records the Board of Directors' decision to distribute a portion of the company's profits to its shareholders. Under the Companies Act, 2013, dividends may be declared out of the profits of the company for the current financial year or any previous financial year(s) after providing for depreciation. The Board may declare an interim dividend at any time during the financial year, while the final dividend is recommended by the Board and approved by shareholders at the Annual General Meeting.
This resolution specifies the dividend amount per share, the dividend rate, the record date for determining eligible shareholders, the financial year to which the dividend relates, and the designated bank account for disbursement. The dividend must be deposited in a separate bank account within five days of declaration and paid to shareholders within thirty days. It is essential documentation for maintaining corporate records and ensuring compliance with statutory provisions regarding distribution of profits.
Benefits of Using a Standard Format
Utilising a professionally drafted board resolution format ensures that all statutory requirements under the Companies Act, 2013 are properly addressed. A ready-to-use template saves valuable time during board meetings, reduces the risk of procedural errors, and provides a consistent framework that captures essential details including dividend rate, record date, bank account for disbursement, and proper authorisation. Standardised formats ensure compliance with dividend payment timelines.
Relevance to Corporate Compliance
Dividend declaration is an important aspect of corporate governance and shareholder relations. Following Company Registration, businesses that generate profits may choose to distribute them to shareholders as dividends. The board resolution forms the basis for dividend payment and must be properly documented. Companies must comply with provisions relating to transfer of unpaid dividends to the Investor Education and Protection Fund (IEPF) if dividends remain unclaimed for the prescribed period.
Board Resolution for Declaration of Dividend – Sample Format
[To be printed on Company Letterhead]
Company Name: _______________________________
CIN: _______________________________
Registered Office: _______________________________
Email: _______________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Date of Meeting: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: DECLARATION OF INTERIM DIVIDEND
The Chairman apprised the Board about the management's recommendation to declare dividend to the members of the Company. After deliberating over the matter, the Board resolved as follows:
"RESOLVED THAT pursuant to the applicable provisions of the Companies Act, 2013 read with the relevant rules made thereunder, an interim dividend of Rs. ____________/- (Rupees ____________ Only) per equity share, at the rate of ______% on each fully paid-up equity share of Rs. ____________/- (Rupees ____________ Only) be and is hereby declared out of the profits of the Company for the Financial Year ____________, payable to those Members whose names appear in the Register of Members as on ____________ (Record Date).
RESOLVED FURTHER THAT the Dividend Account bearing Account Number __________________________ maintained with __________________________ (Name of the Bank), __________________________ (Bank Branch), be used for the purpose of disbursement of the interim dividend..."
For ________________________________________ (Name of the Company)
Signature: _______________________________
Name: _______________________________
Designation: _______________________________
DIN: _______________________________
Frequently Asked Questions
1. What is the board resolution format for the Declaration of Interim Dividend?
The board resolution format for declaring interim dividend should include: reference to applicable provisions of the Companies Act, 2013; the dividend amount per share; dividend rate as percentage of face value; the financial year for which dividend is declared; the record date for determining eligible shareholders; details of the designated dividend bank account; and authorisation for compliance-related actions including TDS deduction.
2. How to write a board resolution for the Declaration of Dividend?
Begin with company details and meeting particulars. State that pursuant to the Companies Act, 2013, the Board declares interim dividend of a specified amount per share at a specified rate on fully paid-up equity shares. Include the record date, financial year, dividend bank account details, total dividend amount. Authorise directors to deposit dividend within 5 days, disburse to shareholders within 30 days, deduct TDS, and file necessary intimations.
3. Is the signature of all directors mandatory in the Board resolution format for Declaration of Interim Dividend?
No, signatures of all directors are not mandatory. The resolution is passed by a majority of directors present and voting at a duly convened board meeting where quorum is present. The certified true copy may be signed by a single authorised director or the company secretary. The minutes should record the names of directors present, voting details, and any directors who abstained.
4. Does the Board Resolution for Declaration of Interim Dividend need to be certified by a professional?
There is no statutory requirement for the board resolution to be certified by an external professional. The certified true copy may be signed by any director or the company secretary of the company. However, listed companies must comply with SEBI regulations regarding intimation to stock exchanges. The resolution forms part of the company's statutory records and supports dividend payment documentation.
5. How do you write a Board Resolution for the Declaration of Dividend?
The resolution should state the Board's decision to declare dividend, specifying: dividend amount per share, dividend rate percentage, face value of shares, financial year, record date for eligibility, designated dividend bank account, total dividend payout. Include clauses for depositing dividend amount within 5 days, TDS compliance, authorisation for directors to execute necessary formalities, and providing certified copies to concerned parties.
