---
title: "Prepare a dividend decision note against the statutory payment tests"
url: "https://ailawframework.com/practice/commercial-and-corporate-advisory/prepare-a-dividend-decision-note-against-the-statutory-payment-tests"
type: "task"
site: "AI Law Framework"
id: "A1-JU20261022-1"
practice_area: "Commercial & Corporate Advisory (contracts, company law, governance)"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Prepare a dividend decision note against the statutory payment tests

> 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…

Canonical page: https://ailawframework.com/practice/commercial-and-corporate-advisory/prepare-a-dividend-decision-note-against-the-statutory-payment-tests  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Commercial & Corporate Advisory (contracts, company law, governance)](https://ailawframework.com/practice/commercial-and-corporate-advisory.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| 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 / versions | 1 jurisdiction versions below |

## Checking plan

**Source-by-source verification**

Check each figure against the accounts and each limb against section 254T.

- What the AI does: 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 does: The lawyer tests the figures under the accounting standards, decides whether each limb is met, and writes the recommendation the directors consider.
- Who reviews: Responsible lawyer with competence in the matter
- Basis: Practical workflow informed by the linked primary sources; the traffic light and working checks are editorial guidance, not a court classification.
- Why: The level reflects what the work is, the consequence of an error, and how much of the output the lawyer must independently re-derive.

## Checks the lawyer makes

1. Calculate assets and liabilities under the accounting standards in force, even if a standard would not otherwise apply to the company.
2. Test the excess immediately before the dividend is declared, and record that the excess must be sufficient for the payment.
3. Address fairness to members as a whole, not only the wishes of the majority.
4. Record the insolvent-trading note in section 254T. A dividend that leaves the company insolvent is an example of material prejudice.

## Notes

- 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.

## Sources

- [Corporations Act 2001 (Cth) s 254T](https://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s254t.html) (checked 2026-10-22)

## Jurisdiction versions

| Jurisdiction | Level |
| --- | --- |
| [United States](https://ailawframework.com/practice/commercial-and-corporate-advisory/prepare-a-dividend-decision-note-against-the-statutory-payment-tests/united-states.md) | Yellow |

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*