How to use it
- 1Before the meeting, prepare up-to-date management accounts showing the profits available for distribution.
- 2Hold the meeting, then fill in the minutes. Replace every [square bracket] placeholder.
- 3Use paragraph 4 for an interim dividend the directors decide to pay, or 4a for a final dividend they recommend to the shareholders. Delete the one you don't use.
- 4Have the chair sign the minutes, then issue a dividend voucher to each shareholder.
- 5File the signed minutes with the company's records and keep them for at least ten years.
What each field means
- Present and in attendance
- Directors present count towards the quorum. Others, such as the company secretary or an accountant, are in attendance.
- Available profits
- The accounts the directors relied on and the profits they show as available, so the minute records the check.
- Amount per share and class
- Dividends are paid in line with shareholders' rights, so state the amount for each share class.
- Record date and payment date
- Who is entitled (shareholders on the register at that date) and when.
What the minutes need to record
GOV.UK's guidance on taking money out of a limited company says directors must hold a meeting to declare a dividend and keep minutes of it, even in a one-director company. Section 248 of the Companies Act 2006 requires minutes of all directors' meetings, kept for at least ten years from the meeting.
The template records who was there, the profits check, the dividend per share, the payment and record dates, and the decision to issue vouchers, so the minute, the voucher and the share register agree.
The profits check
Section 830 says a company may only make a distribution out of profits available for the purpose: its accumulated, realised profits less its accumulated, realised losses. GOV.UK puts it as not paying out more than the available profits from the current and previous financial years.
Record which accounts the directors looked at and the figure they show. That is the evidence the check was made.
Interim or final dividend
Under article 30 of the model articles for private companies, the directors may decide to pay interim dividends, while final dividends are declared by the shareholders by ordinary resolution and can't exceed the amount the directors recommend. Check your own articles if the company adopted different ones.
Licence and disclaimer
Free to use, copy and adapt for your own business or personal records. Please don't resell it or republish it as your own template.
A template is a starting point, not advice for your circumstances. Check the result against the GOV.UK guidance linked below, or ask an accountant.
Related
What else will you need?
- TemplateDividend voucherA dividend voucher is the record a limited company issues each time it pays a dividend.PDFWord
- TemplateBoard minutes: approve accountsBoard minutes approving the accounts record the directors' meeting at which the annual accounts are approved and a director is authorised to sign the balance sheet.PDFWord
- TemplateDividend registerA dividend register is a company's running list of every dividend it declares and pays: the date, each shareholder, the shares held, the amount, and the voucher and board minute behind it.Excel
- ChecklistLimited company year-end checklistAt a limited company's year end, reconcile every bank and loan account, list unpaid invoices and bills, count stock, record asset purchases, review the director's loan account and check dividends were minuted.
Rather we did it?
Countify can handle this for you, for a fixed fee agreed upfront.
Questions
Frequently asked questions.
Do I need board minutes if I'm the only director?
Yes. GOV.UK says to hold a directors' meeting to declare the dividend and keep minutes of it, even if you're the only director.
How long must board minutes be kept?
At least ten years from the date of the meeting, under section 248 of the Companies Act 2006.
Can the directors declare a final dividend on their own?
Not under the model articles. The directors can decide interim dividends, but final dividends are declared by the shareholders by ordinary resolution, up to the amount the directors recommend.
Is tax deducted when the dividend is paid?
No. The company doesn't pay tax on dividends. Shareholders may owe Income Tax once their dividends pass the £500 dividend allowance.
Checked against GOV.UK on · Reviewed by Kamran Ishaq FCCA, Founder & CEO, on .
Sources: Taking money out of a limited company (opens in a new tab) (GOV.UK); Companies Act 2006, section 248: minutes of directors' meetings (opens in a new tab) (legislation.gov.uk); Companies Act 2006, section 830: distributions only out of available profits (opens in a new tab) (legislation.gov.uk); Model articles for private companies, article 30: procedure for declaring dividends (opens in a new tab) (legislation.gov.uk).