casemark/dividend-declaration-resolution

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