Resolution - Declaration of dividend in cash, in property or share issue

Description

The right to receive dividends

• Throughout the year, a company may decide to declare a dividend.
• The company's board of directors has full discretion to declare a dividend, and may only do so if the company has the legal capacity to do so, in accordance with the criteria established by corporate law.
• Before making such a declaration, the directors must check whether the company's articles of incorporation permit the declaration and payment of dividends on the class of shares for which they wish to do so.
• A dividend to shareholders may be paid either in cash, in company's property, or through a share issue by the company.

• For further legal information, please consult our legal FAQ section.

• In general, any decision concerning a corporation must be formalized by a resolution adopted by its board of directors.
• All corporation resolutions must be carefully preserved in the corporation's minute book, ensuring traceability and legal compliance.
• The Legal Publicity Act stipulates that corporation must promptly update the identification of majority shareholders and ultimate beneficiaries with the Registre des entreprises du Québec (REQ).
• This crucial requirement aims to ensure the transparency and accuracy of public information about corporations, making it easier for the public and authorities to verify their legitimacy

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Summary

The following documents are included based on the type of payment chosen for the declared dividend.

• Dividends paid in money:
• The resolution of the corporation.
• Dividend paid by transfer of corporation property/assets:
• The resolution of the corporation;
• The notice to shareholders of the corporation.
• Dividend paid through the issue of shares:
• The resolution of the corporation;
• The statement under section 2.4 of Regulation 45-106 in respect of a private issuer;
• The share certificate.

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