Prepare a dividend decision note against the statutory payment tests
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the accounts the lawyer supplies, set out the three tests in section 254T against the figures: assets over liabilities immediately before the dividend is declared, whether payment is fair and reasonable to the members as a whole, and whether payment materially prejudices the company's ability to pay its creditors. Do not say that the tests are met.
- What the lawyer must review
- The lawyer tests the figures under the accounting standards, decides whether each limb is met, and writes the recommendation the directors consider.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Calculate assets and liabilities under the accounting standards in force, even if a standard would not otherwise apply to the company.
- Test the excess immediately before the dividend is declared, and record that the excess must be sufficient for the payment.
- Address fairness to members as a whole, not only the wishes of the majority.
- Record the insolvent-trading note in section 254T. A dividend that leaves the company insolvent is an example of material prejudice.
Sources
- Corporations Act 2001 (Cth) s 254T · 2026-10-22
These are suggested working checks. Confirm the required checking with the responsible lawyer before work starts; the checking approach does not establish permission to use AI.