Document background
The Board Resolution For Declaration of Dividend is a crucial corporate governance document required under South African law whenever a company decides to distribute profits to its shareholders. This resolution is mandated by the Companies Act 71 of 2008 and must be properly executed before any dividend payment can be made. The document serves multiple purposes: it formally records the board's decision, demonstrates compliance with statutory requirements (particularly the solvency and liquidity test), provides protection for directors in fulfilling their fiduciary duties, and creates a clear audit trail for regulatory compliance. It must include specific details about the dividend declaration, payment mechanisms, and tax implications. For listed companies, additional requirements under JSE Listings Requirements must be addressed in the resolution.
