Board Resolution (Declaring Dividend) (OBCA)

Summary

This precedent is a resolution of the director declaring eligible dividends of a corporation under the Business Corporations Act, R.S.O. 1990, c. B.16 ("OBCA") in Ontario. It contains practical guidance and drafting notes. Unless the articles or by-laws provide otherwise, a director's resolution declaring a dividend should do so expressly and should set out the amount of the dividend. Dividends must be declared to create an enforceable payment obligation and are typically declared by way of a resolution of the directors although that power may be granted to the shareholders in a unanimous shareholder agreement. It is recommended that the director's resolution expressly declare a dividend and set out the amount of the dividend. The resolution may also specify a particular mode of payment and/or fix a date as the record date for purposes of determining the shareholders entitled to receive the dividend, which record date must not precede the date when the dividends are actually paid by ...