---

name: dividend-declaration-resolution language: en description: Drafts a board of directors resolution authorizing a cash, stock, or property dividend to shareholders. Enforces solvency testing (equity and balance sheet), WHEREAS/RESOLVED clause structure, critical date triad (declaration/record/payment), officer authorization, and Secretary certification under Delaware DGCL §170 or equivalent state statute. Use when documenting board approval of a dividend distribution or when corporate governance records require a formal profit-distribution authorization. tags:

• corporate
• drafting

---

Dividend Declaration Resolution

Drafts a board-adopted resolution authorizing a dividend distribution, functioning as a binding corporate record and evidentiary foundation for fiduciary compliance.

Quick Start

Collect these inputs before drafting:

1. Articles of incorporation — legal name, authorized stock classes, preferred dividend preferences, cumulation rights
2. Bylaws — quorum requirements, notice provisions, officer authority
3. Financial statements — balance sheet and income statement within 90 days; retained earnings balance
4. Loan agreements — dividend restrictions, maintenance covenants, lender consent requirements
5. Prior resolutions (if any) — format consistency, accumulated preferred dividends paid
6. Dividend parameters — type (cash/stock/property), amount per share, proposed record date, proposed payment date

Output Structure

1. Header Block

• Corporation legal name, document title ("Resolution of the Board of Directors Authorizing Declaration of [Type] Dividend")
• Meeting type (regular/special), date, location/remote platform, time

2. Meeting Mechanics

Item	Required Content
Notice	Proper notice per bylaw § ___ confirmed; waiver if applicable
Quorum	Quorum present per bylaw § ___ and [State] Corp. Law § ___
Directors present	Full names
Directors absent	Names; whether excused
Presiding officer	Name and title

3. WHEREAS Recitals

Draft numbered recitals in this order:

#	Recital	Key Content
1	Financial review	Board reviewed financials as of [date]; retained earnings of $[X]
2	Statutory authority	Dividend pursuant to [Del. DGCL §170 / [State] [Cite]] [VERIFY for non-DE]
3	Equity solvency	Corporation able to pay debts as they become due
4	Balance sheet solvency	Assets exceed liabilities after giving effect to dividend
5	Business judgment	Dividend in best interests considering capital needs and prospects
6	Preferred satisfaction	Accumulated preferred dividends paid/current [omit if no preferred]
7	Third-party compliance	Loan covenants satisfied / lender consent obtained [omit if N/A]

4. RESOLVED Clauses

#	Resolution	Key Language
1	Dividend Declaration	Declare [cash] dividend of $[X.XX] per share on [Class] stock, par value $[X.XX], totaling ~$[aggregate] based on [X,XXX,XXX] shares outstanding
2	Critical Dates	Declaration Date: date of meeting; Record Date: 10–30 days post-declaration; Payment Date: 2–4 weeks post-record
3	Eligible Shares	Payable to holders of record of [Class] shares at Record Date; treasury shares and forfeiture shares excluded
4	Officer Authorization	CEO, CFO, Secretary authorized to: (a) instruct transfer agent; (b) make accounting entries; (c) file regulatory notifications; (d) execute implementing documents. Ministerial changes permitted if non-material

5. Vote Record

• Count and names: in favor, against, abstaining (with conflict disclosures)
• Resolution declared ADOPTED or FAILED
• Document conflict-of-interest disclosures and recusals by name

6. Secretary Certification and Signature Block

• Secretary certifies resolution duly adopted at properly noticed meeting with quorum present throughout
• Signature lines: Corporate Secretary (name, date), Chairperson of the Board (name, date)
• Corporate seal placement

Guidelines

• Both solvency tests are mandatory — omitting either equity or balance sheet test creates fiduciary exposure
• Delaware §170 [VERIFY] — applies to DE-incorporated entities; confirm equivalent statute for other jurisdictions before citing
• Preferred stock priority — verify cumulative vs. non-cumulative in articles; accumulated arrears must clear before common dividend if cumulative
• Lender covenants — check all credit agreements for dividend blockers and basket limitations before finalizing
• Record date window — Delaware requires record date no more than 60 days before payment [VERIFY]; NYSE/Nasdaq listed companies have additional exchange notice requirements
• Treasury shares — exclude from eligibility and aggregate calculation
• Stock dividends — may require shareholder approval if altering capital structure; confirm under governing state law and articles
• Retention — file executed resolution in corporate minute book per applicable state record-keeping statute

Troubleshooting

• Missing solvency recital — if either equity or balance sheet solvency language is absent, the resolution is incomplete; add the missing recital before finalization
• Non-Delaware jurisdiction — do not default to DGCL citations; insert [VERIFY: STATE STATUTE] and confirm the governing state's dividend authority provision
• Preferred stock arrears unknown — if cumulation status or arrears balance is unavailable, flag with [VERIFY: PREFERRED DIVIDEND STATUS] rather than omitting the recital
• Covenant conflict — if loan agreement review is incomplete, insert [VERIFY: LENDER CONSENT REQUIRED] in the third-party compliance recital
• Record date exceeds statutory window — if proposed record date is more than 60 days before payment, adjust dates or confirm state law permits the gap