Limited companies – dividend vouchers and board meeting minutes

If you run a limited company, you can distribute any profits you make via dividends to your shareholders. But how do you keep a record of your dividend distributions?

Once you have made sure that you have sufficient retained earnings in your company to distribute to its shareholders, you must record your decision to declare dividends via company minutes and issue each company shareholder with a dividend voucher.

This voucher serves as a receipt and should be retained as evidence for tax purposes when calculating your self-assessment liability at the end of the tax year.

It is also a useful document for shareholders to retain for their personal financial records, especially if they need to provide proof of income to lenders or other third parties.

For more background on dividends themselves, make sure you read our key guide – how are dividends taxed?

Dividend Vouchers – Required Information

You must include the following details on dividend vouchers for each shareholder.

• The date.
• The company name and registered number.
• The type of security – usually ‘Ordinary Shares’.
• The shareholder’s name and address.
• The number of shares held by the recipient.
• The amount of the dividend payment.
• Signature (real, or electronic) of a Company official.

Additionally, it is advisable to include a unique reference number for internal tracking purposes, and optionally, the method of payment (e.g., bank transfer). This helps maintain clarity, especially if there are multiple dividend distributions in a financial year.

We have also provided an example dividend voucher below. We recommend you check with your accountant if you have any questions about declaring dividends.

Dividend Voucher

Ltd Company Name & Registered Address

The board of directors of YOUR COMPANY LIMITED met at [ADDRESS] on [DATE] and declared an interim dividend of £X per Ordinary Share in respect to the financial year ended [YEAR END DATE] payable to shareholders registered at the close of business on [DATE].

Shareholder Name & Address

—–

No. of Shares (and type of Share – usually “ORDINARY SHARES”)

Dividend Payment:

—-

Signed By:

Company Official (e.g. Director / Company Secretary).

Optional: Payment Method – e.g. “Bank Transfer to [Account Ending XXXX]”

Board Meeting Minutes

Limited companies are legally obliged to keep records of all dividends made, via board meeting minutes.

An example statement from board meeting minutes would be:

It was resolved that an interim dividend of £X per Ordinary Share in respect of the year ended [YEAR END DATE] be declared on the Ordinary shares and payable on [DATE] to Ordinary shareholders registered at the close of business on [DATE].

The minutes should be signed and dated by at least one director, and stored securely as part of the company’s statutory records.

Some companies also choose to include a reference to the dividend payment in their management accounts for full traceability.

Final thoughts

Most small businesses use online accounting software these days, such as the excellent FreeAgent, which we’ve used at Bytestart since 2010.

The software automatically creates dividend vouchers and board minutes for you when you update your account with a new dividend distribution. It really couldn’t be simpler.

However, even when using software, directors must review the company’s financial position before declaring a dividend, to ensure it complies with the Companies Act 2006.

Issuing dividends when there are insufficient distributable profits could result in them being classed as illegal dividends (‘ultra vires’), with potential tax and legal consequences.

As always, when in doubt, consult a qualified accountant or financial advisor to make sure your dividend process is compliant and tax-efficient.