---
title: "Screen a proposed dividend against the payment conditions"
url: "https://ailawframework.com/practice/in-house-general-counsel/screen-a-proposed-dividend-against-the-payment-conditions"
type: "task"
site: "AI Law Framework"
id: "A40-PE20261022-22"
practice_area: "In-House / General Counsel"
tier: "yellow"
lawyer_review: "required"
last_reviewed: "2026-10-22"
---

# Screen a proposed dividend against the payment conditions

> Set the proposed dividend beside the three conditions and leave each for the lawyer: assets exceed liabilities immediately before the dividend is declared and the excess is sufficient for the payment;…

Canonical page: https://ailawframework.com/practice/in-house-general-counsel/screen-a-proposed-dividend-against-the-payment-conditions  
Last reviewed: 2026-10-22

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

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [In-House / General Counsel](https://ailawframework.com/practice/in-house-general-counsel.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Set the proposed dividend beside the three conditions and leave each for the lawyer: assets exceed liabilities immediately before the dividend is declared and the excess is sufficient for the payment; the payment is fair and reasonable to the shareholders as a whole; and the payment does not materially prejudice the company's ability to pay its creditors. Record the note's example that payment would materially prejudice creditors if the company would become insolvent as a result. Record that assets and liabilities are calculated in accordance with accounting standards in force at the relevant time, even if a standard does not otherwise apply to the financial year. Do not calculate the excess and do not advise on the duty in the note that points to section 588G. |
| What the lawyer must review | The lawyer decides whether each condition is met on the figures and the accounting standards. The lawyer does not treat this screen as the insolvent-trading advice. |
| Written for / versions | 1 jurisdiction versions below |

## Checking plan

**Source-by-source verification**

Trace relied-on content to independent sources and check for relevant material the output has missed.

- What the AI does: Set the proposed dividend beside the three conditions and leave each for the lawyer: assets exceed liabilities immediately before the dividend is declared and the excess is sufficient for the payment; the payment is fair and reasonable to the shareholders as a whole; and the payment does not materially prejudice the company's ability to pay its creditors. Record the note's example that payment would materially prejudice creditors if the company would become insolvent as a result. Record that assets and liabilities are calculated in accordance with accounting standards in force at the relevant time, even if a standard does not otherwise apply to the financial year. Do not calculate the excess and do not advise on the duty in the note that points to section 588G.
- What the lawyer does: The lawyer decides whether each condition is met on the figures and the accounting standards. The lawyer does not treat this screen as the insolvent-trading advice.
- 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. All three conditions are on the screen, including fairness to shareholders as a whole.
2. The comparison of assets and liabilities is immediately before the dividend is declared.
3. The insolvency example is kept as the note's example of material prejudice.
4. The note does not restate section 588G and does not state a dollar excess.

## 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, when a dividend may be paid](https://classic.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/in-house-general-counsel/screen-a-proposed-dividend-against-the-payment-conditions/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.*