Declaration of dividend meaning

Dividends A company generally possesses an implied authority to share its profits with its members, save where the articles of association provide to the contrary. A dividend represents one form of distribution available to members and, in practice, is the distribution that companies make most frequently. To be lawful, any distribution must comply with Part 23 of the Companies Act 2006 (CA 2006) together with the common law rules on distributions, as adapted and informed by that Part. For a fuller consideration of the legal framework and routine practice relating to distributions made by a company, see Practice Note: Distributions. For information about the potential consequences and liabilities arising from failure to comply with the law on distributions, see Practice Note: Unlawful distributions. This Practice Note concentrates on the law and practice that ordinarily apply to the declaration and payment of dividends, which is a subject not specifically addressed in CA 2006, Pt 23. For details of the additional rules, procedures and guidance that apply in particular to dividends...

Company distributions and dividend payments are governed by, and fall under, Part 23 of the Companies Act 2006 (CA 2006). For an in-depth review of the law on distributions and dividends, refer to the Practice Notes: Distributions and Dividends—the legal framework. What is a distribution? For the purposes of CA 2006, Part 23 (sections 829–853), the term “distribution” is construed very broadly indeed. It covers any form of transfer of a company’s assets to its shareholders, in cash or otherwise, save for: the issue of bonus shares (fully or partly paid), and certain: reductions of share capital redemptions of shares buybacks of shares, and distributions of assets to members on the winding up of a company Where assets other than cash are distributed, this is commonly termed a distribution in kind, or in specie. What is a dividend? A dividend is one form of distribution...

A dividend Companies possess an implied authority to distribute profits to members, except where the articles say otherwise. A dividend is one form of distribution available, and in practice it is the form most frequently used. It is the familiar route by which companies pass profits to their members. That said, a company has no legal duty to declare or satisfy a dividend unless the share rights stipulate such a requirement. Any member’s entitlement to a dividend arises solely from the shares they hold; rights to dividends attach to classes of shares. Such rights, if any, must be set out in the terms attached to the shares. A dividend cannot be declared or paid other than in line with the respective rights of the company’s shareholders. Distinct classes of share commonly carry differing dividend entitlements. Compliance with those rights is a precondition to any declaration or payment. In ordinary usage, “dividend” denotes a portion of profits, whether at a fixed rate or otherwise, allocated to the...

This declaration of trust is entered into on [ insert date on which this declaration of trust is executed ] by [ insert name of nominee ] of [ insert address of nominee ] [ , a company registered in England and Wales (registered number [ insert company number ]) ] (the Nominee). BACKGROUND (A) On [ insert date on which LTIP Contingent / Matched Award / Option was granted ] (the Date of Grant), [ insert name of Participant ] (the Participant) received a [ Contingent Award OR Matched Award OR Option ] (the Award) over [ insert number and class of shares under award or option ] in the capital of [ insert name of company whose shares are subject to LTIP awards ] (the Company) pursuant to the terms of the [ insert name of LTIP ] (the Plan)...

this declaration of trust is entered into on [ insert date on which this declaration of trust is executed ] by: [ insert name of nominee ] of [ insert address of nominee ] [ , a company incorporated in England and Wales (registered number [ insert company number ]) ] (the Nominee ). BACKGROUND (A) On [ insert date on which LTIP Restricted Award was granted ] (the Date of Grant ), [ insert name of Participant ] (the Participant ) received a Restricted Award (the Award ) in respect of [ insert number and class of shares under Restricted Award ] in the share capital of [ insert name of company whose shares are subject to LTIP awards ] (the Company ) pursuant to the [ insert name of LTIP ] (the Plan ), and, accordingly, all Shares comprised in the Award have been allotted or conveyed to the Nominee to be retained subject to the Plan thereunder...

ORDINARY RESOLUTION That, on the recommendation of the directors, a final dividend of £[ insert figure ] per [ insert class ] share of [ insert nominal value ] each in the capital of the Company is hereby declared for the year ended [ insert date ] [ payable on [ insert date ] ] [ [ payable ] to the holders of those shares whose names are entered on the register of members of the Company at the close of business on [ insert date ] ]...