Resolution of Directors Approving Stock Dividend
About this form
The Resolution of Directors Approving Stock Dividend is a formal document that allows a corporation's board of directors to declare a stock dividend. This resolution can be adopted during a directors' meeting or through a written consent. It serves to legally authorize the issuance of additional shares to current shareholders based on their existing holdings, which can impact ownership percentages and company valuation. Unlike other resolutions dealing with general corporate matters, this specific form focuses solely on the declaration of a stock dividend.
Key components of this form
- Declaration of stock dividend amount: Specify the dollar value of the stock dividend to be declared.
- Date of issuance: Indicate the date when the stock certificates will be distributed.
- Record date: Note the date used to determine which shareholders are entitled to receive the stock dividend.
- Signature of President: The President of the Corporation must sign to validate the resolution.
- Signature of Secretary: The Secretary of the Corporation also signs to attest the document.
Common use cases
This form is typically used when a corporation decides to reward its shareholders by issuing additional shares as a dividend instead of cash payments. Companies often opt for stock dividends to conserve cash for reinvestment or to strengthen their balance sheet. The resolution should be adopted prior to the record date, which is the key date for determining eligibility for the dividend.
Who can use this document
- Corporate directors looking to declare a stock dividend.
- Corporation officers responsible for managing shareholder communications.
- Legal representatives managing corporate governance documentation.
How to complete this form
- Specify the stock dividend amount in dollars.
- Enter the date when the stock certificates will be issued.
- Identify the record date when shareholders will be assessed for the dividend.
- Have the President sign and date the resolution.
- Ensure the Secretary signs and attests the document accordingly.
Notarization requirements for this form
This form does not typically require notarization unless specified by local law. However, it is advisable to check state-specific rules to ensure compliance.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Avoid these common issues
- Failing to specify the record date for the dividend.
- Omitting signatures from both the President and Secretary.
- Incorrectly stating the amount of the stock dividend.
Advantages of online completion
- Convenience of filling the form from anywhere at any time.
- Editability allows for quick adjustments to amounts and dates.
- Reliable templates drafted by licensed attorneys ensure compliance with legal standards.
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FAQ
Directors will make a recommendation as to the amount of dividend, but they must seek approval from the members at a general meeting or via a written resolution. At this point, the shareholders can decide to reduce the level of dividend payment, but they cannot declare a higher amount.
XYZ CORPORATION RESOLVED: That the sum of is hereby set aside to be distributed to the common stockholders of the Corporation by a declaration of a dividend in the sum of $ per share for each and every share of common stock.
A company's accountants or comptroller recommends a dividend to the board of directors. The board reviews the company's financial statements and considers the dividend. If the board feels that a dividend is warranted, it votes to approve the payment. The declaration date is the day the approval is granted.
The directors make a recommendation to pay a dividend and this goes to shareholder approval via an ordinary resolution. Shareholders cannot increase the amount of dividend decided upon by the directors. Private companies don't have to vote on dividends at an AGM.
Hold the annual general meeting and pass an ordinary resolution declaring the payment of dividend to the shareholders of the company as per recommendation of the Board. The shareholders cannot declare the final dividend at a rate higher than the one recommended by the Board.
Cash dividends are declared by director resolution, which usually specifies a dollar amount per share and directs payment of the dividend to all shareholders entitled to receive it. Property dividends are less common, but are equally available for use by the board of directors.
A dividend declaration typically requires the board to adopt a resolution authorizing the dividend payment (although written consent from every member of the board to pay a dividend may take the place of a resolution).
Resolutions of the board of directors declaring a stock dividend. These resolutions can be used for either a private or public corporation. They are drafted as Standard Clauses to be inserted into board minutes or a resolution in writing of the board.
