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Welcome To Contract Easily! ( Consult, Contract, Share,download Legal Matters Easily )
Contract Easily
Stamp paper is not included with this agreement and is for illustration purposes only. If e -stamp is applicable in your city you can order it during checkout.
Stamp paper is not included with this agreement and is for illustration purposes only. If e -stamp is applicable in your city you can order it during checkout.
Guidelines for Drafting Resolution for Payment of Dividend:
The Resolution for Payment of Dividend is a crucial document used during board meetings to propose and approve the distribution of dividends to shareholders. Follow these guidelines for effective drafting:
Clear Purpose: Clearly state the purpose of the resolution ? the declaration and payment of dividends to shareholders. Specify the financial year for which dividends are declared.
Dividend Amount: Clearly mention the proposed dividend amount per share or percentage of profits to be distributed. Ensure compliance with legal restrictions and company policies.
Legal Compliance: Adhere to all legal requirements and regulations related to dividend declaration as per the company's articles of association and relevant corporate laws.
Record Date: Specify the record date on which shareholders must be listed to be eligible for receiving dividends. This date determines the entitlement of shareholders to the declared dividend.
Common Mistakes to Avoid:
Exceeding Profits: Ensure that dividends are declared only out of profits earned by the company. Avoid declaring dividends in excess of available profits to prevent legal complications.
Non-Compliance with Articles: Review the company's articles of association to ensure compliance with any specific provisions related to dividend declaration.
Inadequate Documentation: Maintain comprehensive records of the board meeting minutes and the resolution for future reference. Inadequate documentation may lead to disputes or legal challenges.
Failure to Disclose Restrictions: Clearly disclose any restrictions on the payment of dividends, such as restrictions imposed by lenders or regulatory authorities.
By following these guidelines and avoiding common mistakes, companies can draft a robust Resolution for Payment of Dividend, ensuring legal compliance and transparent communication with shareholders.