Dividend Resolution and Dividend Statement Template

Updated 18 September 2026

By Mike Wilczynski, Chartered Accountant

A dividend resolution is the directors' minute declaring a dividend and recording that the company passes the three solvency tests in section 254T of the Corporations Act. A dividend statement is the notice each shareholder receives showing the dividend, the franked amount and the franking credit, and it is what they use to claim the credit in their tax return. This generator produces both.

How to use this generator

1. Enter the company, its tax rate for imputation and who signs.
2. Enter the dividend, the franking percentage and the franking account balance so the credits are checked before you declare.
3. Add the shareholders by shares held or by percentage.
4. Create the documents, read the warnings, then download the minute and statements as Word or save them as a PDF.

Build your dividend resolution and statements

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The three tests in section 254T

A company may pay a dividend only if all three conditions in section 254T of the Corporations Act are satisfied, and the directors have to turn their minds to each one:

1. The company's assets exceed its liabilities immediately before the dividend is declared, and the excess is sufficient for the payment.
2. The dividend is fair and reasonable to shareholders as a whole.
3. The dividend does not materially prejudice the company's ability to pay its creditors.

The old profits test was replaced by these in 2010, so a dividend is no longer limited to accounting profits, but the solvency test is real and the directors are personally exposed if it is not met. The generator writes all three declarations into the minute rather than referring to the section, because a minute that just cites section 254T does not evidence that anyone considered it.

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The dividend statement is the document that matters

The minute records the company's decision. The dividend statement, called a distribution statement in the tax law, is the document each shareholder needs in order to claim the franking credit, and it is the one that gets forgotten.

It has to show the amount of the dividend, the franked and unfranked portions, the franking credit, the franking percentage and the company's details. For a private company it is due to the shareholder within four months of the end of the income year in which the distribution is made, so 31 October for a June year end.

The generator produces one per shareholder alongside the minute, each on its own page in the Word download, because issuing the minute and forgetting the statements is the version of this that fails at the shareholder's return rather than at the company's.

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Franking to the account, not to the wish

You cannot frank beyond the franking account balance. Doing so creates a franking deficit and franking deficit tax, which is payable and which also reduces the following year's franking capacity through the offset rules.

So the practical order is: check the balance, then size the dividend. At 30%, a $50,000 balance fully franks a cash dividend of $116,667 and no more. At 25% the same balance franks $150,000. The generator shows the maximum as soon as you type the balance, so you can adjust the dividend instead of guessing.

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Partly franked dividends and the benchmark rule

The first frankable distribution in a franking period sets the benchmark franking percentage, and every other distribution in that period must be franked to the same percentage. For a private company the franking period is normally the income year.

The consequence is that you cannot frank one shareholder's dividend at 100% and another's at nil. Departing from the benchmark by more than a small margin triggers disclosure obligations and, in the wrong circumstances, franking credit denial under the streaming rules.

If different shareholders need different outcomes, the answer is usually different share classes established in advance, not different franking percentages after the fact.

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Setting a dividend against a Division 7A loan

Declaring a dividend and setting it off against a shareholder loan is the standard way to deal with a loan heading for a minimum repayment shortfall. It works, and it does not require cash to move, but the sequence is unforgiving.

Work out the required repayment first with the Division 7A calculator. Declare a dividend at least equal to it. Make the set off effective on or before 30 June of the year the repayment is due, and record it in both the minute and the loan account. A resolution signed in August does not repair a shortfall for the year that closed in June. If the loan has never been documented, start with the Division 7A loan agreement generator.

Provisions referenced: section 254T of the Corporations Act 2001, the three declarations; private company distribution statements due within four months of the end of the income year; benchmark franking percentage rules; franking deficit tax. Company franking rates of 25% for base rate entities and 30% otherwise. Verified 18 September 2026. Documents generated here are drafts to be settled by your adviser against the company's constitution and shareholder agreements.

Dividend resolution FAQ

Do we need a minute to pay a dividend?

Yes. The directors have to declare or determine the dividend and record that they were satisfied of the three matters in section 254T. Without a minute there is no evidence the solvency test was considered, which is a personal exposure for the directors rather than a company one.

Can a company pay a dividend if it has accumulated losses?

Possibly. The profits test was replaced in 2010 by the section 254T tests, so a dividend is not limited to retained earnings. What matters is that assets exceed liabilities with a sufficient excess, the dividend is fair and reasonable to shareholders as a whole, and creditors are not materially prejudiced. Accounting losses do not automatically prevent it, but they make the solvency question a real one.

What is a dividend statement and when is it due?

It is the statement given to each shareholder showing the dividend, the franked and unfranked portions, the franking credit and the franking percentage. The tax law calls it a distribution statement. It is what the shareholder relies on to claim the credit. For a private company it is due to the shareholder within four months of the end of the income year in which the distribution is made.

Where do I get a dividend statement for a private company?

The company issues it. There is no ATO form; the company prepares a statement for each shareholder showing the dividend, the franked and unfranked amounts, the franking credit and the franking percentage, and gives it to the shareholder by the payment date or, for a private company, within four months of the end of the income year. The generator above produces one for each shareholder alongside the minute.

Can we frank one shareholder more than another?

No. The benchmark franking percentage set by the first frankable distribution in the period applies to all of them. Different outcomes for different shareholders are achieved through share classes set up in advance, not by varying the franking.

Can a dividend repay a Division 7A loan?

Yes, by set off, and it is the usual fix. Declare the dividend, apply it against the loan balance, and make the set off effective on or before 30 June of the year the minimum repayment is due. Record it in the minute and in the loan account. The dividend is assessable to the shareholder in that year.

What happens if we frank more than the franking account holds?

The account goes into deficit and franking deficit tax is payable. It is not a penalty as such, since it is broadly recovered as an offset later, but it accelerates the tax and it reduces next year's franking capacity. Sizing the dividend to the balance avoids it entirely.

General information only, prepared without regard to your objectives, financial situation or needs. It is not legal, financial product or taxation advice and should not be relied on as such. Documents generated here are drafts to be settled by your adviser. Liability limited by a scheme approved under Professional Standards Legislation.