Create a clear specimen for recommending a final dividend to members or declaring an interim dividend by the Board. Download an editable Word format or PDF, with the correct approval distinction and a practical compliance guide.
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Estimated aggregate dividend
Enter dividend per share and eligible shares
Estimate only. Reconcile the eligible shareholder list and final amount before the resolution is acted on.
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Quick legal answer
Final dividend: the Board recommends the amount; members decide whether to declare it at the AGM. Interim dividend: the Board may declare it under Section 123(3) from the sources permitted by that section, subject to the company’s financial position and applicable requirements. This distinction changes the operative resolution wording.
This page and generator are for Indian companies. The formats used in Malaysia, Singapore and the Philippines are not interchangeable with this Indian specimen.
Sample wording
Final dividend — recommendation by the Board
“RESOLVED THAT, subject to approval of the members at the ensuing Annual General Meeting, a final dividend of Rs. [amount] per fully paid-up equity share of face value Rs. [face value] each for the financial year [year] be and is hereby recommended for declaration by the members.”
Interim dividend — declaration by the Board
“RESOLVED THAT pursuant to section 123(3) and other applicable provisions of the Companies Act, 2013, an interim dividend of Rs. [amount] per fully paid-up equity share of face value Rs. [face value] each for the financial year [year] be and is hereby declared, subject to the company’s entitlement and compliance with applicable law.”
Specimen extracts only. Complete supporting financial and shareholder particulars before adoption.
Before signing
Check Section 123, depreciation, prior losses and the applicable financial statements before proposing a dividend.
For final dividend, record a Board recommendation for member approval at the AGM. For interim dividend, record the Board declaration.
Reconcile paid-up shares, class rights, record date / entitlement date, and aggregate liability with the register and depository records.
If the company incurred a loss in the current financial year up to the preceding quarter, apply the rate cap in the proviso to Section 123(3).
Deposit the declared amount in a separate scheduled-bank account within five days and pay within the Section 127 period.
Transfer unpaid or unclaimed dividend to the Unpaid Dividend Account as required by Section 124; maintain the related statements and follow-up.
Review Articles, preference-share rights, tax withholding, sector-specific rules and, for listed entities, applicable SEBI LODR and exchange disclosure requirements.
Keep the signed minutes / resolution, supporting financial papers, shareholder entitlement working and payment evidence with company records.
Use a duly convened Board meeting for an interim-dividend declaration. ICSI’s Secretarial Standard on Dividend (SS-3) says interim dividend should be declared at a Board meeting and not by circulation. A final dividend is not declared by the Board at all: the Board recommends it and members decide at the AGM. Apply the current version of the standard and the company’s Articles.
Legal references reviewed for this specimen on 29 September 2026. Check later amendments, notifications, rules and applicable company-specific requirements before use.
For a final dividend, the Board ordinarily recommends a specific dividend per share and aggregate amount for the financial year, subject to members’ approval at the Annual General Meeting. Members may declare a lower amount than the Board recommends, but cannot increase it. The Board resolution should therefore recommend the dividend; it should not state that the Board itself declares the final dividend.
Under Section 123(3) of the Companies Act, 2013, the Board may declare an interim dividend during a financial year or between the close of the financial year and the AGM, from the sources permitted by that section. A final dividend is recommended by the Board and declared by members at the AGM. The generator changes the operative wording to reflect this distinction.
The ICSI Secretarial Standard on Dividend (SS-3) states that interim dividend should be declared at a Board meeting and not by a resolution by circulation. Use a duly convened Board meeting for this resolution and confirm the current applicable standard, the company’s Articles and any sector-specific rules.
The Board recommends the final dividend, but members declare it at the AGM. The members cannot declare more than the amount recommended by the Board. Record the Board’s action as a recommendation and place the proposal before members for decision.
For a final dividend, the Board resolution recommends the amount and members decide whether to declare it at the AGM. For an interim dividend, the Board makes the declaration under Section 123(3); member approval is not the declaration step. Record the decision and its date accurately in the relevant meeting minutes.
The specimen covers the company and meeting particulars, financial year, dividend type, amount per share, face value, estimated eligible shares and aggregate amount, entitlement date if applicable, statutory payment directions and authorisations. Verify all figures against approved financial information and the register of members / beneficial owners’ records.
As a general illustration, when a dividend becomes a present obligation, the company debits the appropriate retained earnings / surplus account and credits dividend payable; on payment, it debits dividend payable and credits bank, accounting separately for any tax withheld. The recognition date differs: members declare final dividend at the AGM, while the Board declares interim dividend. Under Ind AS 10, a dividend declared after the reporting period is not recognised as a liability at that reporting date and is disclosed in the notes. Apply the company’s accounting framework and chart of accounts.
Section 123(4) requires the total dividend amount, including interim dividend, to be deposited in a separate account in a scheduled bank within five days from declaration. For a final dividend, declaration occurs at the members’ meeting, not when the Board recommends it.
Section 127 generally requires a declared dividend to be paid or the warrant posted within thirty days, subject to the statutory exceptions. If an amount remains unpaid or unclaimed after that period, Section 124 requires transfer to the Unpaid Dividend Account within the next seven days.
No. This specimen is for Indian companies under the Companies Act, 2013. Malaysia, Singapore and the Philippines have separate company laws, filing practices and resolution conventions; use a jurisdiction-specific form reviewed against that country’s current law.
No. This is a specimen board-resolution format, not a prescribed MCA form. Adapt it to the company’s facts, Articles of Association, applicable rules and professional advice before signing or circulating it.
Browse the free document library and related board resolution formats.
This specimen is general information and a drafting aid, not legal or tax advice, and not a prescribed MCA form. Have the final draft reviewed by a qualified professional familiar with the company’s Articles, financial position and applicable law.