Board Resolutions: Declaration of Cash Dividend

by Practical Law Corporate & Securities

This Standard Clause provides board resolutions for a company's board of directors to declare a cash dividend. Suitable for both private and public companies, these resolutions are formatted for easy insertion into board minutes or a unanimous written consent. This Standard Clause addresses the fundamental requirements for dividend declarations, including the determination of the legal source for payment, such as surplus or net profits, with a focus on the Delaware General Corporation Law (DGCL). They guide the board in setting a record date for stockholders and a payment date for the dividend. For public companies, this Standard Clause also includes resolutions to help ensure compliance with Securities and Exchange Commission (SEC) disclosure obligations, such as filing a Form 8-K, and meeting the notification rules of major stock exchanges. The resolutions provide a framework for authorizing company officers to take all necessary actions to effect the dividend payment.