The declaration of a dividend generally falls under the purview of the company's board of directors . Before declaring a dividend, the directors must ensure that the conditions stipulated by applicable law and the company's articles of association are met.

Depending on the circumstances, it may be necessary to:

• verify that the company's financial situation legally allows the declaration of the dividend;
• check the categories or series of shares in circulation and the dividend rights attached to them;
• determine the amount of the dividend or its method of calculation;
• determine the form of the dividend, when it can be paid other than in cash;
• determine the categories or series of shares that entitle the holder to the dividend;
• to have a resolution adopted by the board of directors declaring the dividend;
• specify in the resolution the date of declaration and, where determined, the date of payment;
• record the resolution in the minutes book;
• to carry out the required accounting entries and tax formalities.

It is important to distinguish between the declaration of a dividend and its payment. The declaration corresponds to the legal decision of the board of directors, while the payment corresponds to the payment made in accordance with the terms stipulated in that decision.

The requirements for declaring a dividend may also differ depending on whether the company is incorporated under the Quebec Business Corporations Act or the Canada Business Corporations Act . It is therefore important to verify the rules applicable to the company before adopting the resolution.

In summary , before declaring a dividend, the directors must verify that the legal requirements are met, determine which shares are eligible for the dividend, and adopt a board resolution. The resolution must then be recorded in the minutes book, and the applicable accounting and tax formalities must be completed.