Directors Resolution Authorizing Loan to Pay Dividend

Declare a capital dividend for a Canadian business corporation with this template Directors Resolution form.

For tax purposes, it's important that all resolutions are properly passed and actions taken at the correct times.

Resolutions

• The Board of Directors declares the capital dividend on a specific class of shares.
• The corporation makes an election under Section 85 of the Income Tax Act (Canada). The dividend does not become payable until the election is made.

Format and Jurisdiction

This form is available in MS Word format and is editable and reusable. 

This resolution template can be used by business corporations incorporated under a Business Corporations Act throughout Canada.

Before a stock dividend can be paid to a corporation's shareholders, the Directors must pass a resolution to that effect.

• This template Directors' Resolution declares a dividend payable on the corporation's shares of stock.
• The dividend will be paid by way of issuing new shares to the shareholders on a pro rata basis (based on the ratio of their current shareholdings to the aggregate of all outstanding shares issued by the corporation).
• This is a generic corporate form (not country specific).
• Download your copy of the Directors Resolution Declaring Stock Dividend and present it to the Board for signature.

Declare a safe income dividend for shareholders of a Canadian corporation with this downloadable Directors Resolution template.

• The corporation's directors declare a 'safe income' dividend pursuant to the Income Tax Act (Canada) on a specified class of shares.
• Payment of the dividend is conditional upon the shareholders' undertaking to repay their pro rata share of the dividend if the total cumulative dividend exceeds the 'safe income' as determined by the corporation's accountants.
• Intended for use only in Canada.

Prepare a Resolution of the Directors of a Canadian corporation declaring a share dividend with this ready-made template.

This professionally crafted legal template is designed for business owners, corporate directors, and legal professionals in Canada.

This downloadable form helps you formally approve and document the declaration of a dividend on one or more classes of shares, while maintaining compliance with Canadian corporate law.

Why You Need this Directors' Resolution

A share dividend is a strategic way to return cash to shareholders without negatively impacting corporate cashflow. However, each dividend must be properly authorized and documented through a formal directors’ resolution.

This template ensures that the corporation:

• Properly approves the declaration of a dividend.
• Maintains accurate corporate records.
• Complies with the provisions of the Canada Business Corporations Act (CBCA) or applicable provincial legislation.
• Reduces legal risk by clearly documenting decisions of the directors.

What This Template Covers

This ready-to-use downloadable Directors' Resolution template includes all essential components required for a valid share dividend declaration:

• Identification of the corporation and directors
• Details of the share dividend
• Confirmation of board approval
• Reference to the applicable statute (customizable to fit your situation).

Key Benefits

✔ Legally Structured for Canada
Prepared to align with Canadian corporate standards and common legal practices.

✔ Saves Time and Legal Costs
Avoid drafting from scratch—get a reliable, professional document instantly.

✔ Easy to Customize
Editable format allows you to tailor the resolution to your corporation’s specific needs.

✔ Professional Record-Keeping
Ensure your corporate minute book is complete and audit-ready.

How It Works

1. Download the template instantly.
2. Fill in your corporation’s details.
3. Customize share dividend terms as needed.
4. Have the directors review and sign.
5. Insert the signed resolution into your corporate minute book.

Who This Is For

• Small business owners and incorporated entrepreneurs.
• Corporate directors and officers.
• Accountants and legal professionals.
• Anyone managing a Canadian corporation’s records.

Important Information for Users

Does this template work for all Canadian corporations?
It is suitable for most corporations governed by the CBCA or provincial equivalents, but you may customize it as needed.

Is this legal advice?
No. This is a general-purpose template. You should consult a lawyer for advice specific to your situation.

Instant Download - Get Started Today

Simplify your corporate record-keeping and declare share dividends properly with this Directors’ Resolution Template for Canadian Corporations. Download now and put your documentation on solid legal footing.