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 § 170 tests against the figures: whether the dividend is declared out of surplus, as §§ 154 and 244 define it, or, if there is no surplus, out of net profits for the fiscal year of the declaration and/or the preceding fiscal year, and whether a preference-capital deficiency would bar a net-profits dividend. Do not say that the tests are met.
- What the lawyer must review
- For a Delaware corporation, the lawyer tests the figures, decides whether § 170(a) of the General Corporation Law is met, and writes the recommendation the directors consider. Section 173 requires that dividends be paid only in accordance with the chapter, in cash, property or shares. Section 174 makes directors jointly and severally liable for a wilful or negligent violation of § 160 or § 173, for six years. Section 172 protects a director who relies in good faith on records and on information from a person reasonably believed to be competent.
- Written for / version
- United States versionUS
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
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.