Board Resolution: Recommendation of Final Dividend (Section 123)
Recommend a final dividend at the board meeting that approves the accounts, for declaration by members at the AGM.
What it is
A final dividend is recommended by the board and declared by the members at the annual general meeting; members cannot declare more than the board recommends. Under Section 123 of the Companies Act, 2013, dividend is paid out of the profits of the year after providing for depreciation, or out of undistributed profits of earlier years, and the company may transfer a part of profits to reserves. The resolution records the rate per share, the record date and the proposed payment date.
When it is used
- Board meeting approving the annual accounts.
- Before sending the AGM notice.
- Planning cash outflow for dividend payment.
What the template covers
- Company name, CIN and meeting details
- Financial year and type of dividend
- Dividend per share and face value
- Number of paid-up shares
- Record date and payment date
- Transfer to reserves and recommendation to members
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Company
Company Name; CIN; Registered Office
Meeting
Board Meeting Date; Place
Dividend
Financial Year; Type of Dividend; Dividend per Equity Share (₹); Face Value per Share (₹); Paid-up Equity Shares (number); Record / Book Closure Date; Proposed Payment Date
Reserves
Transfer to General Reserve (% of profit)
Authentication
Chairman Name; Chairman DIN
Stamp duty, registration and filing
Once declared, the dividend amount is deposited in a separate bank account within five days and paid within 30 days (Section 127). Dividend is taxable in the hands of shareholders, and the company deducts TDS on dividend to resident shareholders above the threshold (check the current rate and threshold for the year). Unpaid dividend is transferred to the unpaid dividend account after 30 days.
Generate the BR — Dividend Declaration
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. the related MCA e-form)? Contact SKAG and Associates
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Frequently asked questions
Who declares a final dividend?
The members at the AGM, on the recommendation of the board.
When must dividend be paid?
Within 30 days of declaration.
Is TDS deducted on dividend?
Yes, on dividend to resident shareholders above the threshold for the year; non-residents are subject to withholding at the applicable rate.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.